Tuesday, 3 November 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President, and the members of the Senate in Parliament assembled. We, the undersigned citizens of Australia, draw the attention of the House to our strong and unequivocal opposition to existing regulations and/or proposed legislation supporting the ``Introduction of `Irradiation of Food' (Food Ionization)'' in Australia, or the importation or exportation of Irradiated Foods into or out of Australia. Your petitioners therefore pray that a Bill be passed totally banning Food Irradiation in Australia, and the importation of Irradiated Foods into Australia. by Senator Haines (from 142 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned expresses concern that some scientists in Australia are intent on undertaking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-86 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the Senate and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experiments on human embryos. And your petitioners as in duty bound will ever pray. by Senators Boswell (from 566 citizens), Burns (from 133 citizens), Harradine (from 125 citizens) and Stone (from 334 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we call upon the Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. As in duty bound your petitioners will ever pray. by Senator Crichton-Browne (from 1,334 citizens). To the Honourable the President and members of the Senate in Parliament assembled: the humble petition of the undersigned citizens of Australia respectfully showeth: 1. That we are totally opposed to the introduction of a compulsory national identification system under the control of the Federal Government. 2. That we reject the identity card proposal because it will involve massive expenditure of taxpayers' funds while being ineffective in combating the problems of tax evasion, illegal immigration and abuse of the social security system. 3. That we are deeply concerned at the invasion of each Australian's privacy and the loss of their freedom that would occur if the identity card was introduced. Your petitioners therefore humbly pray that the Senate should: Reject the identity card or allow for a national referendum so the Australian people can decide themselves whether they want the costly, ineffective and intrusive un-Australian identity system. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 17 citizens). To the Honourable the President and members of the Senate in Parliament assembled, your humble petitioners showeth: 1. The proposed Australia Card will have a dramatic impact on the lives of all Australians. 2. Therefore your petitioners request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Crichton-Browne (from 697 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Sheil (from 119 citizens). To the Honourable the President and Senators in Parliament assembled. The humble petition of the undersigned citizens of Dawson electorate respectfully shows that: The Hawke Labor Government has no mandate to introduce its flawed and costly ID card proposal, and that the card will not stop tax and welfare fraud and will invade the private lives of Australians. Your petitioners humbly pray that the Senate will urge the Government to reject Labor's ID card proposal. by Senator Boswell (from 12 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the proposed national ID Card and numbering system threatens the privacy of law-abiding Australians opening the door to computer matching of personal information, will cause inconvenience to rural people in particular, and will result in massive compliance costs for private business. That the Joint Parliamentary Select Committee Report of 1986 showed that the Australia Card will not be effective in combating taxation and social security fraud and illegal immigration, as its cost savings are based on faulty estimates. That accordingly the Senate and Parliament should reject the Australia Card Bill. And your petitioners as in duty bound will ever pray. by Senator Crichton-Browne (from eight citizens). To the Honourable the President and members of the Senate in Parliament assembled: We the undersigned, (i) are greatly disturbed by the dangers to health posed by passive smoking, and evidence of which is being documented daily by medical authorities around the world; (ii) note that environmental tobacco smoke has been identified as the major pollutant in aeroplane cabins, and that its direct threat to health is recognised in the special leave provisions for flight attendants specifically on grounds of upper respiratory infections; (iii) appreciate the government's undertaking to legislate for smoke-free travel on aeroplanes, but are dismayed at the apparent reluctance to follow up the Minister for Aviation's December announcement with action; and (iv) call upon the government to make smoke-free aeroplane travel a reality without further delay, and to ensure that smoke-free areas which cannot be contaminated by recycled pollutants, are available at all aerodromes. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 160 citizens). Senator GARETH EVANS(Victoria-Minister for Transport and Communications) —by leave-I present to the Senate the following petition, which is not in conformity with the Standing Orders as it is not in the correct form, from 134 citizens praying that the Senate urge the Government to oppose privatisation of Special Broadcasting Service multicultural television: We, the undersigned strongly protest the proposed commercialisation of television station S.B.S. Since its inception, S.B.S. has brought to Australia a high standard of multi-cultural programmes and news reporting. It has broadcast in a wide range of languages, designed to meet the needs of our ethnically diverse culture. Also, through its presentation of programmes from different countries, it operates to break down barriers between cultural groups. The introduction of sponsors with their predominantly monetary interest can only lead to a drop in standards. We strongly urge you to oppose privatisation of S.B.S. Multi-cultural Television. We also urge you to reject the dilution of the multi-cultural basis of S.B.S. by requiring it to broadcast English language `cultural' programmes of no specific relevance to the ethnic communities. Surely the A.B.C. itself provides an effective service in that area. Petitions received. Senator HARRADINE(Tasmania) —Pursuant to my notice of intention given yesterday, I now withdraw Business of the Senate, notice of motion No. 1, standing in my name for today for the disallowance of a word and figure in paragraph 2 of schedule 1 of the Administrative Arrangements (Consequential Amendments) Ordinance 1987. I seek leave, Mr President, to make a short statement relating to the withdrawal of the notice. Leave granted. Senator HARRADINE —The purpose of my notice of motion was to disallow that part of the Ordinance which would have enabled the Minister to grant exemptions without those exemptions, in turn, being the subject of regulation and, therefore, disallowance by this chamber or, indeed, by the House of Representatives. I have today received a letter from the Acting Minister for the Arts, Sport, the Environment, Tourism and Territories, Senator Graham Richardson, indicating that as soon as possible the necessary steps will be taken by the Government to introduce a further Ordinance to ensure that exemptions that are made under the Classification of Publications Ordinance will, themselves, be made by regulation and thus be subject to disallowance by either House of Parliament. That being the purpose of my notice of motion, I now withdraw the motion. Incidentally, I have sent a copy of this letter to the leaders, the Whips and the independent senators. Senator HARRADINE(Tasmania) —I seek leave to move a motion to take note of papers tabled yesterday. Leave granted. Senator HARRADINE —I move: That the Senate take note of the following papers, tabled on 2 November 1987: National Health and Medical Research Council-Medical Research-Annual Reports 1985 and 1986. I seek leave to continue my remarks later. Senator Peter Baume —On a point of order, Mr President: The Senate already has before it a motion to take note of each of those papers and the debate is under way. It is not proper for Senator Harradine, who was not here, to move the motion again. The PRESIDENT —I assume that is why Senator Harradine sought leave, and leave was granted. Senator Puplick —With the greatest respect, Mr President, since when has this been possible? Nobody was notified of what Senator Harradine was seeking leave to take note of. Nobody was under the impression that he was seeking leave to take note of papers for which I had already moved the motion that the Senate take note of the papers. The debate was under way. The motion is already before us. The PRESIDENT —Order! I believe that this matter was discussed with the Whips, that the procedure was agreed to, and that the procedure is in order. Leave has already been granted. Leave granted; debate adjourned. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. A review of Federal registration charges for interstate vehicles-Inter-State Commission report-Pursuant to section 10 of the Inter-State Commission Act 1975. 2. Companies and Securities Law Review Committee-Annual report 1986-87. Motion by (Senator Gareth Evans) agreed to: That, where an order of the Senate specifies a time for the consideration of a matter, at the specified time: (a) if a question is before the Senate consideration of that question shall be interrupted, a Senator speaking shall be taken to have leave to continue the Senator's speech, and resumption of debate on that question shall be made an Order of the Day for a later hour of the day without any question being put; (b) if the Senate is in committee the Chairman shall report progress, and further consideration of the business before the committee shall be made an Order of the Day for a later hour of the day without any questions being put; or (c) if a vote is being taken the vote shall be completed and the procedures in paragraph (a) or (b) then followed as appropriate. Motion (by Senator Reid) agreed to: (1) That the Standing Committee on Infrastructure, when considering the matters referred to it on 26 October 1987, viz: ``all notices of intention to modify or vary the plan of lay-out of the city of Canberra and its environs, and all modifications and variations of that plan, under section 12a of the Seat of Government (Administration) Act 1910'', be empowered to sit as a joint committee with the Standing Committee on Infrastructure of the House of Representatives when that Committee is considering those matters. (2) That the joint committee appoint as its chairman the Chairman of the Senate Committee or the Chairman of the House of Representatives Committee. (3) That the quorum of the joint committee be 2 Senators and 2 Members of the House of Representatives. (4) That the subcommittee of the Senate Committee, when considering the matters referred to in paragraph (1), be empowered to sit with a subcommittee of the House of Representatives Committee, when that subcommittee is considering those matters, as a subcommittee of the joint committee. (5) That a Senator who is not a member of the Senate Committee may attend a meeting of the joint committee or a subcommittee, with the approval of the joint committee or subcommittee, and participate in its proceedings and deliberations, but may not vote. (6) That nothing in these resolutions be taken to affect the power of the Senate Committee to consider the matters referred to in paragraph (1) or its duty to report to the Senate on those matters. Senator REID(Australian Capital Territory) —Pursuant to standing order 336, I move: That the resolution of the Senate be communicated by message to the House of Representatives requesting the concurrence of that House in paragraphs (2) to (5) inclusive. Question resolved in the affirmative. Motion by (Senator MacGibbon) agreed to: That the Senate- (a) notes that, on this day, 2 November 1922, Qantas flew the company's first scheduled airline service when its Armstrong-Whitworth FK-8, G-AUDE, departed Charleville at 5.30 a.m. for Cloncurry, with 108 items of mail on board, piloted by one of the founders of Qantas, Paddy McGuinness, and with the legendary Arthur Baird as engineer; and (b) congratulates Qantas on its 65 years of continuous operation as an airline, its growth into a major international airline from its small origins and notes its great contribution to the development of Australia. Bills received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bills may proceed without formalities, may be considered together and be now read a first time. Bills read a first time. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(2.10) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- PETROLEUM RESOURCE RENT TAX ASSESSMENT BILL 1987 [No. 2] Mr President, this Bill is the first in a package of four Bills that will give effect to the Government's decision to introduce a petroleum resource rent tax on profits from certain off-shore petroleum projects. The proposed tax regime was announced in detail in June 1984, after extensive consultation with the industry and the States. These Bills are now being reintroduced in the same form in which they were before the Senate when Parliament was dissolved for the election and the Bills consequently lapsed. Petroleum resources are, in their most basic sense, community property and the Government believes that the community as a whole should share in the potentially high returns from the exploitation of these scarce, non-renewable resources. At the same time it is recognised that participants in petroleum projects who do not earn high profits in relation to the amount invested and the risk involved, particularly when oil prices decline, should be able to operate secure in the knowledge that excise and royalties which are based on production will not apply. The Government believes that a resource rent tax related to achieved profits is a more efficient and equitable secondary taxation regime than the excise and royalty system that it is to replace. I emphasise that the proposed tax replaces the existing system-it is not in addition to it. In contrast to production-based secondary tax regimes, the petroleum resource rent tax will be payable only in respect of projects earning a high rate of return on outlays. Particularly in light of the current volatility of world oil prices, the resource rent tax system thus offers considerable benefits to the petroleum industry. It strikes a reasonable balance between the objectives of satisfying the right of the community as a whole to share in the benefits of profitable off-shore petroleum projects, and of providing the participants with adequate returns for the risks they accept in undertaking off-shore exploration and development activities. The Bill incorporates amendments made after government consideration of representations made by the petroleum industry. The provisions of the Bill nevertheless follow closely the proposal as announced in June 1984, while accommodating the retention lease system in relation to off-shore petroleum exploration. Mr President, I now turn to outline the more significant features of the tax. General Application The tax is to apply to a person's taxable profits from the recovery of petroleum in off-shore areas where the Commonwealth's Petroleum (Submerged Lands) Act 1967 applies, other than in areas covered by production licences granted on or before 1 July 1984 and the permit areas from which those production licences were drawn. The tax will therefore not apply to the North West Shelf permit areas or Esso's and BHP's Bass Strait permit area-excise and royalty arrangements will continue to apply in those areas. As the petroleum resource rent tax is profit-based, rather than production-based, it will apply only where there is an excess of project-related receipts for a financial year over both project-related expenditure for the year and undeducted expenditure of previous years brought forward at a compound rate. This compounding of expenditure ensures that the investment presented by the expenditure obtains an appropriate rate of return free of secondary tax. The rate of compounding for expenditure that remains undeducted at the end of a financial year will be determined according to when it was expended. Expenditure (generally exploration expenditure) more than 5 years before coming into force of the first production licence in a permit area will attract compounding at a rate equal to the GDP deflator rate-currently around 8%. More recent expenditure in respect of the project will be carried forward at a rate equal to the prevailing long term bond rate increased by 15 percentage points (currently this produces a rate of about 28 per cent). In board terms, a petroleum project incorporates the production licence area, and such treatment and other facilities and operations outside that area as are integral to the production and initial on-site storage of marketable petroleum commodities such as stabilised crude oil, condensate and liquefied petroleum gas. As a practical matter, two or more projects will be treated as a single project for tax purposes where the Minister for Primary Industries and Energy, having regard to relevant factors, considers that they should be so treated and issues a certificate to that effect. The boundaries of a petroleum project will not extend beyond the point at which a marketable petroleum commodity is initially stored after production-that is, the project boundaries will not extend to `downstream activities' such as refineries and facilities for the transport of marketable products from initial storage. Assessable Receipts Liability for petroleum resource rent tax is to be assessed on the accruals basis that generally applies in determining income tax liability. Assessable receipts from the project will, therefore, be taken into account in the financial year in which they are receivable. Assessable project receipts will include amounts receivable from the sale of petroleum or of a marketable petroleum commodity. In the event that a marketable petroleum commodity is not sold after the point of initial on-site storage, the market value-or a fair and reasonable value-of the commodity will be treated as an assessable receipt of the project. The need to attribute a value could arise, for example, in the case of an integrated producer who both extracts crude oil and refines it. Deductible Expenditure Expenditure of either a capital or a revenue nature which is directly related to a petroleum project will be deductible in the year in which it is incurred against any assessable receipts for the year. Any excess of deductible expenditure (other than closing-down expenditure) over assessable receipts at the end of a year will be compounded forward for deduction against receipts in future years. Deductible expenditure comprises exploration expenditure, general project expenditure and closing-down expenditure, subject to the exclusion of certain specific items of expenditure. Exploration expenditure consists, broadly, of expenditure (other than excluded expenditure) in an exploration permit area that is directly related to exploration for petroleum and will include expenditure on the recovery of petroleum and the production of a marketable commodity prior to the coming into force of a production licence. Exploration expenditure includes related expenditure on storage and processing facilities and on employee amenities. Exploration expenditure will be deductible against assessable receipts of any project established within the exploration permit area. Where there are two or more projects in a permit area, exploration expenditure deductible in a particular year is to be set off against the project that relates to the production licence which first came into force, then against subsequent projects producing assessable receipts in that year. Special rules apply where a production licence from one permit area is combined with a production licence from another permit area to form a single project. I mentioned earlier that the provisions of this Bill take into account the retention lease system introduced in 1985. Retention leases are of considerable benefit to the industry. They allow title to be held over a promising discovery for a number of years without insisting on any major ongoing exploration or development program in the area. To prevent potentially significant revenue losses arising from compounding of deductible amounts, exploration expenditure related to a retention lease area will be able to be offset only against projects in that area. Exploration expenditure in the rest of the permit area will not be deductible against a retention lease project. That expenditure, if incurred more than five years before the coming into force of a production licence in the retention lease area, will attract compounding at the GDP deflator rate. General project expenditure comprises expenditure in a production licence area-or combined production licence areas-on the establishment of a project, on recovering and producing a marketable petroleum commodity and on storing that commodity adjacent to the production site. It includes relevant expenditure on storage and processing facilities and employee amenities. Closing-down expenditure is made up of expenditure in closing down a petroleum project and specifically includes expenditure on environmental restoration of a project site. If, at the end of a project's life, there are insufficient assessable receipts for a year against which to offset closing-down expenditure for the year, a tax credit of 40 per cent of the excess expenditure is provided. Of course, closing-down credits in respect of a project will not be permitted to exceed the petroleum resource rent tax previously paid in respect of the project. Certain expenditure is specifically excluded from petroleum resource rent tax deductibility. Examples are interest payments and payments made under a cash bidding system. As petroleum resource rent tax is to be a deductible expense for income tax purposes, income tax payments are not to be deductible for resource rent tax purposes. Fringe benefits tax payments are also excluded. Instalments The practical operation of the Bill will require the payment of petroleum resource rent tax by instalments in any year in which a person's assessable receipts from a project exceed the deductible expenditure (including any compounded expenditure of previous years). Three instalments of tax will be payable-determined on the basis of assessable receipts and deductible expenditure in the instalment period and an appropriate proportion of compounded expenditure from previous years. The liability for tax assessed at the year's end will be reduced by earlier paid instalments for the year. The Bill also contains the usual machinery provisions of a tax law-dealing with such things as collection and recovery procedures-and provides objection and appeal rights for taxpayers dissatisfied with decisions under the proposed petroleum resource rent tax regime. Full details of the provisions of the Bill are contained in the explanatory memorandum that has been circulated to honourable senators. Mr President, the Bill in its present form deals with projects that might straddle both a petroleum resource rent tax area and an area under Commonwealth or State jurisdiction and subject to excise and/or royalties. It does this by apportioning a quantity of petroleum from a project to be subject to petroleum resource rent tax. This issue raises a number of complex questions-some requiring resolution in Commonwealth-State discussions. Nevertheless, it is the Government's intention that, for reasons of both administration and industry certainty, the petroleum resource rent tax should apply to the total project where it extends beyond the resource rent tax area. The Government intends to initiate discussions with the States on the question of treatment of projects which straddle resource rent tax areas and State excise-royalty areas. Once these questions have been resolved, any necessary amendments will be introduced. Mr President, on the basis of current world oil prices, it is unlikely that any petroleum resource rent tax revenue will be received before the 1988-89 financial year. Due to the continuing fluctuations in world oil prices and the uncertainties inherent in predicting success in off-shore petroleum exploration and subsequent production, the amount of revenue likely to be obtained in any year cannot be projected. I present the explanatory memorandum to this Bill and commend the Bill to this place. PETROLEUM RESOURCE RENT TAX BILL 1987 [No. 2] Mr President, the assessment Bill I have just introduced provides the legislative framework for determining the off-shore petroleum projects to be subject to petroleum resource rent tax, and the taxable profit of a participant in such a project. This Bill will formally impose and declare the rate of that tax as 40 per cent. The explanatory memorandum circulated to honourable senators also explains the provisions of this Bill. I commend the Bill to this place. PETROLEUM RESOURCE RENT TAX (INTEREST ON UNDERPAYMENTS) BILL 1987 [No. 2] Mr President, this Bill will formally impose the interest charge payable under section 65 of the proposed Petroleum Resource Rent Tax Assessment Act 1987, the Bill for which I have just introduced. Honourable senators will be aware that under section 55 of the Australian Constitution laws imposing taxation may deal only with the imposition of taxation and may not contain any extraneous matters. Because interest payable under section 65 of the assessment Act might technically be regarded as a tax, this Bill is designed to ensure that constitutional requirements are met. Its provisions are also explained in the memorandum that has been circulated. I commend the Bill to this place. PETROLEUM RESOURCE RENT TAX (MISCELLANEOUS PROVISIONS) BILL 1987 [No. 2] The new profit-based taxing regime for off-shore petroleum project is, in respect of those projects, to replace the existing production-based excise and royalty arrangements. This Bill will amend the Excise Tariff Act 1921 and the Petroleum (Submerged Lands) (Royalty) Act 1967 to effect that replacement. The Bill will also amend the Income Tax Assessment Act 1936 to provide income tax deductibility for petroleum resource rent tax paid other than by way of instalments. Conversely, refunds and certain credits of petroleum resource rent tax are to be made subject to income tax. Decisions under the Petroleum (Submerged Lands) Act 1967 will assume greater importance for the Commonwealth with the introduction of petroleum resource rent tax. That Act is therefore being amended by this Bill to provide for decisions relating to the development of petroleum pools straddling production licence areas, including pools which straddle the outer boundary of the territorial sea, to be taken jointly by the Minister for Primary Industries and Energy and the relevant State or Northern Territory Minister. The scope of the Crimes (Taxation Offences) Act 1980 is also being extended by the Bill, so that offences against that Act will cover schemes for the fraudulent evasion of petroleum resource rent tax in the same way as they deal with other taxes of the Commonwealth. Mr President, details of this Bill are also set out in the explanatory memorandum that has been circulated. I commend the Bill to this place. Debate (on motion by Senator Knowles) adjourned. Bill received from the House of Representatives. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(2.11) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to establish a new ceiling on the export charge leviable on exports of dried vine fruit; namely currants, sultanas and raisins. At present the operative rate of charge set by regulations and the maximum rate allowed under the Dried Fruits Export Charges Act 1924 are the same. This Bill seeks to raise the maximum permissible charge under the Act from $15 to $30 per tonne to enable the operative charge rate set by regulations to be increased beyond $15. Moneys collected under the Act are used to finance the operations of the Australian Dried Fruits Corporation which promotes and controls the export of Australian dried vine fruit. Australian dried vine fruits meet very severe competition on the international market and in the face of this it is imperative that the Corporation be able to continue an effective promotional program in order to maintain market share. The cost of promoting Australian dried vine fruit on overseas markets has increased significantly as a consequence of the devaluation of the Australian dollar. In addition, the Corporation is now carrying out a wider range of promotional activity. These factors have placed additional funding demands on the Corporation. The Corporation has therefore sought an increase in the maximum rate of charge to enable an increase in the operative rate to be effected by Regulations. The proposed increase in the maximum rate of charge has the full support of the Australian Dried Fruits Association which is the principal industry organisation. The amendment proposed in the Bill will have no impact on revenue and expenditure. Any increase in revenue as a result of a subsequent change in the operative charge rate by regulations will be offset by a matching increase in appropriation to fund the Australian Dried Fruits Corporation. The Act provides that consultation with the industry must occur before the operative rate can be increased by Regulations. I commend the Bill to honourable senators and present the explanatory memorandum to this Bill. Debate (on motion by Senator Reid) adjourned. Motion (by Senator Tate) agreed to: That the following Bill be introduced: A Bill for an Act to amend the Commonwealth Legal Aid Act 1977. Motion (by Senator Tate) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator TATE(Tasmania-Minister for Justice)(2.12) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to provide for the replacement of the Commonwealth Legal Aid Council by two new national advisory bodies, namely, the National Legal Aid Representative Council and the National Legal Aid Advisory Committee. For convenience I will refer to the bodies as `the Council' and `the Committee'. The Bill derives from the decision of the Government, which was announced by the Attorney-General on 19 December 1986, to establish a new national structure to administer, co-ordinate and provide advice to the Government on legal aid. The structure comprises three elements, namely, the Council, the Committee and an Office of Legal Aid Administration in the Attorney-General's Department. The Council and the Committee will advise the Attorney-General and me, as Minister for Justice with responsibility for legal aid, on the full range of legal aid issues including needs, funding, organisation and delivery methods, on a national basis. The Office of Legal Aid Administration, which was established in December 1986, has brought together in a single, externally identifiable unit, all aspects of the management of legal aid policy and funding within the Department thereby substantially improving the managerial control of national legal aid policy and the expenditure of Commonwealth legal aid funds, which comprise by far the greatest single component of the total funds available for legal aid in Australia. In 1986-87 total input to legal aid services from Commonwealth and State sources, other than Aboriginal Legal Services and State funded community legal centres, was $129.6m of which the Commonwealth provided $77.8m-60 per cent. Before deciding on the new advisory structure the Government considered at length various options and adopted this approach with a view to reconciling the aim of providing a streamlined economical body with the need to provide an appropriate forum for the views of all the various interest groups in legal aid to be heard at the national level. The history of this legislation began with the establishment in 1978 of the Commonwealth Legal Aid Commission. The function of the Commission was to provide an overall advisory, co-ordinating and monitoring role in relation to the need for and provision of legal aid in Australia. It had executive as well as advisory responsibilities. In 1981 the Commission was superseded by the Commonwealth Legal Aid Council, as one of a series of measures carried out by the then coalition Government which it said were to reduce administrative costs and increase efficiency. However, the Labor Government allowed the Council to go out of existence in June 1985, when the terms of the then members expired, because the Government considered that the Council had been largely ineffective in its operation. In particular, the Government felt that there was a need to substantially improve the efficiency of the delivery of legal aid services through the State and Territory commissions, and that a reorganisation of the national legal aid structure was required in order to do this. In seeking to achieve this goal the Commonwealth has taken a fresh approach to the basis on which funds are provided to the States, under Commonwealth-State agreements, in relation to the operation of the legal aid commissions in those States. In April 1987 an agreement with the New South Wales Government regarding the funding of legal aid in that State came into effect. This agreement is seen as a model for renegotiations which have commenced with the four other States where legal aid commissions currently exist and agreements have been in place for some time. Negotiations with the Tasmanian Government will be proposed on the same model. Under the agreement made with New South Wales the Commonwealth and the State provide fixed proportions of the net operating costs of the legal aid commission in that State. These steps are part of the Commonwealth's overall strategy of continuing its involvement in the funding of legal aid while at the same time ensuring that the States make an equitable contribution towards the total cost of legal aid services and the efficiency, economy and effectiveness of those services. It is basic to the Government's policy that the provision of legal aid throughout Australia should be such as to ensure that there is uniform access to legal aid, and thus to the judicial system, and that the nature and quality of legal aid services provided does not put assisted persons at a disadvantage on the basis of the particular State or Territory in which they reside. It is envisaged that the two new advisory bodies, which were established in September on an administrative basis, pending the passage of this legislation, will play a key role in analysing the important issues in the legal aid field and, particularly in the present economic climate, will seek ways of providing legal aid more effectively and economically. They can also be expected to examine alternative means of reducing the demand for legal aid by appropriate changes to substantive law and legal procedures. The Bill provides for the Council to consist of 20 members appointed on the basis of the position they hold, or on the nomination of one of the major legal aid interest groups. Because of its size and nature, the Council will normally meet only once a year. The membership is as follows: the Chairperson and Director of each State or Territory legal aid commission; the Chairman of the National Legal Aid Advisory Committee; two representatives of the private legal profession; two representatives of the community legal centres; a representative of the Australian Council of Social Service; a representative of the Australian Legal Aid Office; and a representative of the Office of Legal Aid Administration. Where appropriate, the appointments will be made after consultation with the relevant bodies. The Bill establishes the Committee as a body comprising 7 members appointed on the basis of their knowledge of or experience in legal assistance or in matters related to the Commonwealth's involvement in legal assistance. Such related matters include financial and management expertise. Although the backgrounds and experience of the individual members should desirably represent a reasonable spread of areas relevant to the provision of legal aid, the committee would not be directly representative of any areas, organisations or groups. The Committee will be able to raise issues on its own initiative and will also be available to provide advice to the Government on specific areas of legal aid which require attention. The Committee will meet regularly. The number and timing of its meetings will be a matter for it to determine, although it will be required to meet at least twice each year. The Council and the Committee will, broadly speaking, provide advice and make recommendations on the whole range of legal aid issues, especially the extent of the need for legal assistance and the most effective, economical and desirable ways of satisfying that need. More specifically, these bodies may advise and make recommendations to the Minister on the extent of the need for legal assistance in Australia and cost-effective ways of meeting that need; the effectiveness of delivery methods; reforms to substantive law or other changes which may affect the cost of legal assistance; the level of Commonwealth funds provided for legal assistance; the effectiveness of the arrangements for the application of Commonwealth funds towards the provision of legal assistance; the funding of community legal centres; community legal education; and any other matter relating to the provision of legal assistance. The differences between the two bodies are essentially those of their nature and orientation: the Council will provide a forum for the major interest groups to express their views once a year whereas the Committee will be primarily a working party which has an essentially practical role. The possibility of efforts of the respective bodies in relation to particular projects being duplicated should be minimised by the presence on the Council of the Chairman of the committee. The establishment of the Office of Legal Aid Administration within the Attorney-General's Department has created a focus for the management, co-ordination and evaluation of the Commonwealth's legal aid policy and funding. The Office also administers the various schemes under which the Attorney-General may grant financial assistance in respect of legal and quasi judicial proceedings. The Office will provide the necessary secretariat support services, and arrange for and monitor the work of research consultants for the advisory bodies. The creation of the new advisory bodies as an integral part of the national legal aid structure should contribute substantially to improving and making more cost-effective the use of available resources for the provision of legal aid services. In conclusion, I take this opportunity to place on record the Attorney-General's and my own appreciation of the work of the successive chairmen of the Commonwealth Legal Aid Council-Mr Justice Rae Else-Mitchell and Mr Rowland Ball-those who were members of the Council and those officers of the Attorney-General's Department who worked to the Council, for their commitment and conscientiousness in carrying out the work of the Council during the four years of its existence. I present the Explanatory Memorandum to the Bill. I commend the Bill to the Senate. Debate (on motion by Senator Lewis) adjourned. Consideration resumed from 2 November. Motion (by Senator Gareth Evans) agreed to: (1) That the Senate concurs in the Resolution transmitted to the Senate by Message No. 51 of the House of Representatives relating to the use by the House of Representatives Standing Committee on Infrastructure of the evidence and records of the joint committees on the Australian Capital Territory appointed during previous Parliaments. (2) That the provisions of the Resolution, so far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in the Standing Orders. (3) That the foregoing Resolution be communicated to the House of Representatives by Message. Debate resumed from 2 November, on motion by Senator Reynolds: That the Bill be now read a second time. Senator WALTERS(Tasmania)(2.13) —This is the second time in just a couple of days of the Senate sittings that we have been debating legislation which attempts to deal with the blowout in the costs of Medicare, the Government's ideological toy which slowly but surely is reducing the standards of health care in Australia and, at the same time, sending us all broke. When I spoke last week on this issue, Senator Walsh, in following me, said: Total spending on health as a proportion of gross domestic product (GDP) in Australia has declined in recent years, albeit marginally. It currently- I emphasise the word `currently'- stands at around 7 1/2 per cent of GDP . . . That is misleading the Senate. I believe it is quite deliberately doing so. There are no current figures for total health care as a percentage of GDP. Senator Crowley —Mr President, I raise a point of order. Senator Walters has just suggested that Senator Walsh in his statement deliberately misled this Parliament. I ask Senator Walters to withdraw that remark. The PRESIDENT —Will you withdraw, Senator Walters? Senator WALTERS —Yes, Mr President. I point out that the Minister was well aware that there were no current figures but, according to the Hansard report, he deliberately quoted figures as if they were current. As I said, he said `currently standing at 7 1/2 per cent of GDP'. I have sought those figures and I have found that they applied to 1984-85. By no stretch of the imagination could 1984-85 figures be declared as current for this year, 1987-88. Either the Minister is completely inept or he was well aware that he was misquoting figures. Hence, because there are no figures to substantiate my claim that Medicare costs have blown out, or indeed to substantiate Senator Walsh's claim that they have decreased, we must look elsewhere to know just what is happening. We do know that the numbers of medical services processed have gone up considerably. This can be seen by looking at the 1984-85 figures, which show that the number of services processed was 113 million. In 1985-86 the figure went up to 121.4 million. In 1986-87 it was 128.6 million. If there has been an increase of 15.6 million additional services processed, one can presume that the costs have gone up. I do not think that would be stretching anyone's imagination too much. We also know that the waiting lists at public hospitals have increased tremendously. One would assume that the Government has not deliberately closed beds and that there must be additional hospital services. As we are all well aware-and I quoted the figures just a few days ago-the number of people on waiting lists in Tasmania is 3,560. In Victoria 26,288 people are on waiting lists. As I said then, a headline in a New South Wales newspaper the other day read `Need an operation? Come back in four years'. The waiting lists have increased tremendously, all in an attempt to pay for this ideological toy of the Government-Medicare. We also know that over the last three years the tax levy has been forced up. It was to be one per cent and, unless the costs of Medicare had increased, one would not have expected that levy, as a percentage, to jump, but indeed it has. It has gone up $325m in a full year. Yet the Minister tells us that the costs have gone down. Another thing we know is that the costs to the people have gone up-I presume the Government knew that when it took the ceiling off the Medicare levy. This is not just a transfer to the people-the costs must have gone up for the ceiling to have been taken off. There are many other things we know. We also know that there has been a tremendous shift from the public purse to the private purse. The basic hospital and medical insurance rebate was abolished. I will give some prices on that. Savings for the Commonwealth in August 1985 on pharmaceutical benefits when prescription fees increased from $4 to $5 amounted to $40m. The gap payment in 1986-a rise to $20 from $10-meant a saving of $18m. A reduction in pathology service fees meant a saving for the Government of $50.5m. The saving for pharmaceutical benefits in delisted items was $18.9m. The pharmaceutical benefits fee increase brought the Government in $56.6m. The saving in that year alone was $144m. Let us look at the next year. Diagnostic imaging brought in $39.8m. After hours consulting-in other words, saying that the general practitioners can no longer charge a separate fee for after hours calls-brought the Government $23.1m. Optometry brought $11.6m, and ophthalmology brought $11.3m. The Government brought in that wonderful decree that a consultant physician can look after the patient for only one consultation with two follow-up visits, something which, in Estimates Committee hearings, Dr De Souza said was not in the best interests of the patient on so many illnesses that were put to him, and the Minister was forced to agree that the Government's decree should be renegotiated because it was throwing the baby out with the bath water. The consultant physicians had an estimated saving of $14.1m. Other scheduled items were $28.1m and in-hospital medical services were $18m-a saving in that total year, according to the Budget, of $208m. Let us have a look at the increase in revenue. In July 1985, the removal of Medicare ceilings brought the Government $7m. In November 1986 the increase in the levy brought $175m. Let us have a look to see what the clampdowns in the medical profession have created. The total savings for the year 1986-87 were $225.9m. The deferral of the schedule fee in 1986 led to $85m. If it is all added together, it comes to a total of $670m, some of which has been passed to the private purse, but the rest is just additional revenue that the Government has said is necessary because of the increase in the Medicare bill. Again, in this legislation, the Government is admitting, even though the Minister in this place will not, that the costs are going up. This legislation deals with the pharmaceutical benefits scheme, and the Minister is once again saying that the Government is concerned about the increasing costs of the pharmaceutical benefits scheme over the past two years. The Minister has now come up with the extraordinary idea whereby the Pharmaceutical Benefits Advisory Committee has to look at each drug. In the past, it has been required by statutory charter not to take costs into account when making its recommendations, except in special circumstances, or except when considering drugs of similar efficacy and toxicity. This, of course, according to the Minister when he brought in Medicare, will give us the best and cheapest medical and hospital care in the world. He has now resorted to saying that the advisory body is to look at every drug to see whether, if it is too expensive, another less expensive drug can be substituted-one that is almost the same but not necessarily as good-or if some other treatment can substitute for the taking of that drug. The Minister even says to the people of Australia, `I am getting the Committee to look at every drug and, if surgery can take the place of prescribed drugs, the Committee must advise me that the drug can come off the schedule and surgery can take its place'. I will be very interested to hear what some of the Government members of the committee I was on last year looking at unnecessary surgery will have to say in this regard. Senator Crowley is to follow me in this debate. I will be most interested to hear her views. As a member of that committee it was certainly her opinion that unnecessary surgery should not take place. The Pharmaceutical Benefits Advisory Committee is required to give consideration to alternative forms of treatment such as surgery instead of the prescribing of some drugs for no other reason than that it is cheaper for the Government if the Committee comes up with that sort of advice. The Minister's second reading speech states: The Committee will not be allowed to recommend the listing of a particular drug which is substantially more costly, unless it is satisfied that, at least for some patients, the drug provides significant therapeutic advantages over alternative therapy. Who is to say what is significant? I have no idea what is significant. I am quite sure that the Minister would have no idea. The Committee could not possibly know either. I hope that the Minister at the table, the Minister for Local Government (Senator Reynolds), will let us know what the second reading speech means by `significant'. It goes on: The Government has no objection to paying high prices for new drugs that offer significant therapeutic advances over existing drugs or other forms of treatment. But it does not believe that the taxpayer should foot the bill for very expensive drugs that offer only minimal advantages over much cheaper alternatives. What is minimal? Is the comfort of the patient considered minimal? Must the patient undertake surgery and perhaps be under an anaesthetic and run the risk of death? A percentage of deaths follow the administering of anaesthetics. Any medical person would attest to the fact that there are risks associated with anaesthetics. What is minimal in that regard? The Australian Democrats and the Opposition are putting up an amendment to ask for clarification in a number of areas. The second part of the Bill deals with the payment of pharmaceutical benefits to chemists. As we all know, payments have been lagging far behind. The Government has been completely irresponsible. It has not paid its debts, although so many others would have been sued, taken to debt collectors and, indeed, gaoled if they had attempted to carry on in the way the Government has done. The Government did not abide by its own legislation. It acted in breach of it by not paying its bills to the pharmacists on time. So now the Government has come up with all sorts of incentives with which I have no quarrel. I hope only that the pharmacists take them up. I believe that, with the new technology around, the big pharmacies that can afford it should take up the suggestions the Government has made so long as there is an incentive for them to do so. There is another system of reimbursement of pharmacists. Such payments are calculated on the basis of a random sample of prescriptions submitted for processing in each claim. To minimise the sampling variation in payments and to take account of high priced items, the rules will allow pharmacists to submit up to 10 per cent of items in a claim for full processing, with the remainder to be reimbursed by sampling methods. I have no complaint with that. However, I have considerable complaint about the fact that the Government, with this toy, its ideology, in the form of Medicare, is determined not to discontinue the expensive practice of allowing bulk billing for everyone. Rather than acknowledging that it has been wrong and allowing bulk billing only for those disadvantaged patients, it has created the situation whereby the cost of health services has outstripped the inflation rate to a considerable degree. I wish to cite some Australian Bureau of Statistics figures in that regard. In the June quarter 1986, the inflation rate for all groups was 8.4 per cent and the cost of health services increased by 14.2 per cent. In the September quarter, the inflation rate for all groups was 8.9 per cent and the cost of health services increased by 16.2 per cent; in other words, the difference was almost double. In the December quarter, the inflation rate for all groups was 9.8 per cent and the cost of health services increased by 26.2 per cent. The figures for the March quarter this year are unavailable because at that time we encountered problems with the Australian Bureau of Statistics. In the June quarter, the inflation rate for all groups was 9.3 per cent and the cost of health services increased by 22.4 per cent. In the September quarter just past, the inflation rate for all groups was 8.3 per cent and the cost of health services increased by 20.9 per cent. The other day Senator Walsh followed me in a debate. During his contribution he said that health costs had been reduced and that his current figures proved that. That was nothing short of misleading the Senate. I expect the Minister for Local Government, who is at the table, to be able to give me at least some idea of where she believes that Senator Walsh could possibly have got his figures. For many years the Opposition has been warning the Government about the problems it was creating with regard to the cost of Medicare. The socialist Minister for Community Services and Health, Dr Blewett, put forward his socialist ideology on the ID card very clearly. Indeed, he has proved beyond any shadow of doubt that he carries that ideology into the health care area. I shall read to the Senate the Minister's remarks on the ID card. He said: Let me say as a socialist that it is the interests of the community that should come before the individual right . . . we shouldn't get too hung up as socialists on privacy because privacy, in many ways, is a bourgeois right that is very much associated with the right to private property. Nothing could be more socialistic than that statement. Because the Minister has carried that socialistic view into the health care area, 64.4 per cent of families have decided that they cannot rely entirely on the Medicare levy and now have to insure privately. They are forced to do that otherwise they would be on the end of health care waiting lists. I have mentioned many times in this place that a survey has been conducted by the Australian Bureau of Statistics. It is unbelievable, but it indicates that 46 per cent of couples with children with a family income of $126 a week are paying for private health insurance. How they do that on that sort of income is beyond my imagination, but they do it because they do not trust the Government's system. It is not just the Opposition that has been warning the Government that it has to get off this slippery slide and that, unless it makes corrections, the Government's debt will stay there forever. Let me quote from what Professor Penington had to say because the Government considers him such an authority that he was asked to go on a committee to advise the Government. Professor Penington said: The cost of the present system is out of control. He went on to say: I personally feel an enormous concern about the present state of the public sector health institutions. I feel they are facing a very critical period for their future as to whether they will survive. He, too, is saying that the Government must rethink and stop bulk billing everyone in society. He also said: It has been a tribute to the ethical standards of the medical profession that growth in the utilisation and cost has not been far greater than it has been in the past ten years. The growing waiting lists at public hospitals and the increased number of services provided under Medicare with the rapid growth in areas such as private pathology, now well ahead of the Budget estimates, mean a rethink of medical policy was overdue. Professor Penington is the man from whom the Government sought advice. The Government not only will not take advice from its adviser but also will not take advice from the Opposition, even when it realises that it is wrong. The Minister stood up in this place and said that Medicare costs are now less than they were; that current figures indicate that those costs stand at 7 1/2 per cent of gross domestic product. These figures are not accurate and pertain to 1984-85. The Minister has been completely irresponsible in misleading the Senate in the way that he has. Senator Crowley —Mr Deputy President, I take a point of order. I have meant to do this on a few occasions. I simply ask Senator Walters to withdraw those slurs against the Minister. The DEPUTY PRESIDENT —To say that the Minister is irresponsible is a debating point and it is not a matter which comes under the Standing Orders. Senator CROWLEY(South Australia)(2.38) —It is my sad lot to have to rise and speak in this chamber about one minute before the Melbourne Cup is run. For the record, it is a pity that I am bound to be here and not there. I make no apologies at all for being one of those people in Australia who thoroughly enjoy the Melbourne Cup and the significance of that race. Firstly, I would like to refute the claims made by Senator Walters-some of which I think are absolutely outrageous-and, in particular, her claims that Senator Walsh deliberately misled this place. It was a very grave claim and one which she subsequently withdrew. I think Senator Walters never lets fact interfere with her preferred fictions. One of her preferred fictions is that she is well able to say at length what other people think. For the record, before Senator Walters leaves the chamber, I might cite some figures from Information Bulletin No. 2, dated May 1987. Under the heading `Australian health expenditure 1982-83 to 1984-85', when referring to health costs, it is stated: Proportion of gross domestic product- I hope that as she leaves Senator Walters will attend to this- in Australia total health expenditure as a proportion of GDP fell from 7.7 per cent of GDP in 1982-83 to 7.5 per cent in 1984-85. Preliminary estimates indicate that health expenditure in 1985-86 was also 7.5 per cent of GDP. This indicates that the economy as a whole has been growing more rapidly that the health sector in the last few years. Senator Walters should draw her mind to focus on those figures instead of preferring her very unsocialistic view of health costs and her assessments of Ministers in this place, let alone her assessments of anybody else who has a different view from hers. The National Health Amendment Bill (No. 2) 1987 before us today is not about waiting lists, it is not about the cost savings from reducing consultant specialist fees after the third visit. I will come back to that because, again, the misrepresentation by Senator Walters is well worth commenting on. It is not about how many people may or may not, according to a Press release, wait four years to go into hospital in New South Wales. It is not about Medicare. It is about the pharmaceutical benefits scheme. Lest I forget or fail to come back to the point about consultant specialists, let me say now that the Government has never required consultant specialists to see sick people only three times. It provided that the extra fee for consultants seeing people with chronic illnesses referred to them by specialists be paid for only three visits; after that, their usual specialist fee would continue. To suggest that in any way the Government was saying that people could see a consultant only three times is grossly wrong. It is an example of the sort of sleazebag argument used by the Opposition to misrepresent the situation and to terrorise and create fear in people who may listen to any of those arguments. The legislation goes to changes to the pharmaceutical benefits scheme. In summary, the legislation deals with two principal areas. One is the rearrangement of the Pharmaceutical Benefits Advisory Committee, increasing its membership by three. The second involves changes in the way payments are made to pharmacists for the processing of prescriptions. The Government is very mindful of the importance of cost containment. I find it quite remarkable that Senator Walters could somehow think that she was criticising the Government when she read out such a comprehensive list of the cost constraints that the Minister for Community Services and Health (Dr Blewett) has been able to implement within the health portfolio while at the same time maintaining the very comprehensive, adequate and excellent service of health care that is provided in this country. I take the list of figures as a high recommendation, not a castigation, of the Minister. Again, the same proper and responsible approach is evident in this legislation affecting the pharmaceutical benefits scheme. The Government properly has to consider cost constraints, particularly at the time when currently we have lost so much revenue in this country principally through the fall in prices for our primary materials that we sell overseas. Apart from that, the current economic situation in general means that not only is it necessary to look for cost constraints but also it is responsible government to do so. If, as has been done in this legislation, cost constraints can be introduced in a proper and thoughtful way and at the same time the adequate provision of proper therapeutic medications to people who need them is assured-in conjunction with the safety net provisions previously introduced by the Government for the containment of costs to individuals in the community who may have large needs from chronic ill health or to very large families-this is a matter for congratulation, not heavy criticism, of the Government. I think those two points need to be borne in mind. This legislation acknowledges a number of things. It acknowledges the importance of consulting the pharmacy profession. The Government, in particular Minister Blewett, has done that very comprehensively. It acknowledges the importance of restraining costs and it acknowledges the importance of providing medication to people at manageable levels of cost. The Government has done all of that in this piece of legislation. The importance of consulting the pharmacists is evident in the way in which this legislation takes account of recommendations from the Pharmacy Guild of Australia in times past. It is certainly interesting to listen to the curious criticisms from the Opposition about increasing the Pharmaceutical Benefits Advisory Committee by three doctors. The suggestion that somehow this is an indication of extravagance or insufficiency or I do not quite know what from listening to Senator Walters-nor yet from reading the Opposition's contributions in this place last night-still seems to me to be something of a surprise. The Pharmaceutical Benefits Advisory Committee is properly constituted of medical professionals because they are the people who have, we understand, the proper and best understanding of what medications are needed in what conditions and in what amount as part of appropriate treatment. It is precisely because of their principal concern in this area that they are the people who constitute the Pharmaceutical Benefits Advisory Committee. I note that the Australian Democrats intend to amend the legislation to require that one of those doctors be a member of the Doctors Reform Society. I have no objection to that amendment, though I do think it is a bit precise. I cannot imagine that such a consideration may not have been in front of the Minister anyhow, as he usually seeks to have representation from all sections of the profession on committees. But that amendment will give me no great headache. The Opposition seemed to suggest that somehow these proposals, going as they do to cost considerations and the requirement that the Pharmaceutical Benefits Advisory Committee take into account costs as it has never had to do before, mean that the Committee now has to throw out any other of the considerations it has taken into account before. My understanding is that the very adequate work done by this Committee will be in no way changed except to add to its requirements for deliberation proper considerations of costs. The Committee will not become wayward or ignore therapeutic standards. It is not about to become disregarding of what is proper medication. It is not about to do away with the appropriate procedures for testing medications, for proper evaluation of drugs, for therapeutic efficacies-to address some of the points that were raised by Senator Puplick and Senator Peter Baume in this place yesterday. The consideration of what is a significant difference is just the sort of thing that those people involved in the assessment of the therapeutic evaluation of drugs can address. They will also no doubt be able to define for Senator Walters, if it is a matter of great desperation for her, what `minimal' would mean when it comes to advantages that the Committee has to address. I think that any suggestion that the Pharmaceutical Benefits Advisory Committee now being required to take into account costs means that it is going to disregard all its previous other requirements under statute law is not only wrong but is getting close to a smear of that Committee and its very good work. I presume that is not the intention of the Opposition, but I would like to make it clear that it should be understood that it is simply being asked to take a further consideration into account when it makes its deliberations. Senator Walters suggested that it seemed a bit odd for this Committee to be considering the alternatives of surgery. I am not here to debate extensive medical practice, though it certainly seems those who are not doctors in this place are more inclined to have a go than those of us who have some idea of what we are talking about. Senator Walters also challenged me to see what I was going to say. I think she thought I would be caught out over the matter of discretionary surgery. There is absolutely no indication in this legislation that the Minister is urging the Pharmaceutical Benefits Advisory Committee to start recommending discretionary surgery. Senator Walters can sit there and grin, but she is very mischievous in doing that and in casting aspersions on the good name of the Pharmaceutical Benefits Advisory Committee. She stands corrected. Senator Peter Baume —Come off it, Senator. Senator CROWLEY —Not at all. That is exactly the implication of what Senator Walters had to say. I am perfectly prepared to rise to the challenge and say that that is a very misleading way of arguing. We all know full well that doctors will run through exactly that list when assessing the best way to treat a patient, when deciding whether surgery should be the process or whether therapeutic medication should be the process, or sometimes whether they leave it open and take the wait and see process. It is not for us to assess what doctors shall decide is the best consideration. But the doctors on the Pharmaceutical Benefits Advisory Committee are being asked to consider whether a new and expensive alternative medication should automatically be put on to the list, or whether it should be considered as part of an overall understanding of appropriate treatment in this area. Senator Peter Baume —Give us some examples, Senator. Senator CROWLEY —I can, if Senator Baume wants me to, but I will resist the temptation until I have time at the end. Senator Peter Baume —Surgery or drugs. Senator CROWLEY —Since the honourable senator is asking me to rise to this temptation, I will. I would consider the treatment of warts as one small example. The honourable senator might well argue that the medication of drug treatment for the treatment of warts is not very expensive, and that may well be the case. But any proper consideration of the treatment of warts tends to the question whether people use medication or whether they use surgery. Senator Walters —Is she really a doctor? Senator CROWLEY —Senator Walters, I find that most offensive. For the record, and for the nth time, yes, madam, I am. The honourable senator may check my records, and that is something that she does not have. Senator Schacht —Is Senator Walters the wart you are trying to fix? Senator CROWLEY —Do not tempt me, Senator Schacht. The debate on this legislation is being widely distracted from the points at issue, and they are, from what I understood the Opposition to be saying last night, the things that it has no real objection to. Senator Puplick took us through the prospects of the drug treatment for acquired immune deficiency syndrome and its extraordinary expense. He was also at pains to congratulate the Government on being bothered to see that this medication should be afforded, for two reasons: first, its therapeutic trial, one could almost say, and secondly, the Government's compassionate consideration for the people who suffer this condition. I think that is the whole point. The Pharmaceutical Benefits Advisory Committee will do as it has always done: assess medications on balance for their efficacy, and now for their cost. But it will of course continue to do work that it has always done, and that is to evaluate new medications coming into the community for appropriate use, and those medications will have to be properly tested. Not only does the Committee test medications, but the Government is also concerned to evaluate properly all sorts of prostheses, therapeutic appliances and other varieties of inserts or applications that are part of medical treatment. We have seen what can happen when these medications or appliances have not been properly assessed. We have only to consider the huge legal consequences of the Dalkon shield, to cite just one example, where a different approach to the testing of therapeutic products is now part of the deliberations of those drug and treatment evaluation procedures. I would have thought that this would have been an occasion for congratulating the Government, not scoring cheap points about whether the deliberations suggested in the outline of this legislation are appropriate. Indeed they are. I think they are very responsible and they take account of the important work that the Pharmaceutical Benefits Advisory Committee not only does but will continue to do, with increased secretarial assistance and increased membership. In fact the Committee will be able even further to draw on the consultant specialists who have advised it in the past and who will continue to advise it in the future. The Opposition's points on those matters, as far as I can understand Senator Peter Baume's and Senator Puplick's contributions, were thoughtful and really did not take issue on them too much. The point that the Opposition did want to argue, though, was its support for the intended amendment to be put by the Australian Democrats, objecting to the Minister having unfettered discretion to de-list a medication. The legislation says quite clearly that the Minister's power to remove the item from the pharmaceutical benefits list will require him to have regard to previous views and current views expressed about that drug or medicinal treatment. In fact clause 4, proposed new sub-section 2ab, states: Before making a declaration under subsection (2aa), the Minister shall have regard to any view previously expressed to the Minister for the purposes of this Part by the Pharmaceutical Benefits Advisory Committee and relating to the drug or medicinal preparation, or the class of drugs and medicinal preparations, as the case may be. Senator Puplick —Where does it say `current view', Senator, as you have just asserted? It says `previous view'. It does not say `current view'. Senator CROWLEY —The legislation makes it quite clear that the Minister shall have regard to any view previously expressed and relating to the drug or medicinal preparation. I presume that that makes sense. It is in no way open to the interpretation that in 1950 somebody said that X medication is not appropriate. What is being said is that relevant comments from the Pharmaceutical Benefits Advisory Committee should be taken into account. It says `shall have regard to'. Senator Coulter suggested that the Minister is not compelled to have any regard at all. I think that that misrepresents entirely what this legislation states. I urge Senator Coulter to rethink his comments on that point. Senator Coulter, at page 1583 of yesterday's Senate Hansard, stated: Senator Puplick has drawn attention to the fact that the legislation gives the Minister the power to withdraw a drug from the schedule without reference to the Pharmaceutical Benefits Advisory Committee. That is absolutely wrong. The legislation, as I have just read out, requires that the Minister shall have regard to a view from that Committee about that medication. Senator Peter Baume —Previously expressed. Senator CROWLEY —He is hardly likely to have regard to what it will say tomorrow, Senator. Anybody with common sense who read that would understand that the legislation addresses precisely the fear that the honourable senator has raised, but he has raised it in opposition and contrary to what is clearly in the legislation. Further, clause 4 of the Bill requires that any declaration by the Minister removing an item from the list shall be tabled in the Parliament and subject to disallowance. Again, public scrutiny of the Minister's actions is perfectly open and available through the disallowance procedure in the Senate. One objection was that the reasons needed to be put in the disallowance motion. I would have thought that any debate on disallowance would go to those reasons and that it was unnecessary to do anything more than to move for disallowance, if people so feel, about a medication that has been de-listed. This in no way, as has been suggested by the Opposition, gives unfettered power to the Minister to behave irresponsibly; quite the opposite. He shall have regard to what the Pharmaceutical Benefits Advisory Committee says. Anyhow, under the legislation introduced by the Minister those de-listed pharmaceuticals will be able to be tabled in Parliament and subject to disallowance. There will be very proper, comprehensive public scrutiny of these matters. It is also suggested that the Minister will rush around de-listing medications, contrary to the advice of the Pharmaceutical Benefits Advisory Committee. These are very misleading and unnecessary criticisms. It is entirely proper for the Senate to be concerned that the Minister be required to make decisions and deliberations thoughtfully, taking heed of proper advice from the proper people. I find it interesting that, somehow, this Pharmaceutical Benefits Advisory Committee-to go back to Senator Puplick's comment-is okay when it recommends a drug but is somehow not okay when it suggests to the Minister that a drug be de-listed. Senator Puplick cannot have it both ways. If he doubts those words, I recommend that he read the text of his own contribution yesterday. This objection from the Opposition and the proposal from the Australian Democrats by way of amendment is entirely unnecessary because I believe that the Bill has very thoroughly provided for proper scrutiny and proper behaviour in this area. The other significant changes in this piece of legislation are changes in the way in which pharmacists will be paid for the pharmaceutical benefits that they have provided. That will be done principally in three ways. The pharmacists can submit records to the Department using modern technology, floppy disks or modems, for a more rapid assessment of the pharmaceuticals that they have dispensed. They will then receive their due repayment in a faster turnaround time. As well, to encourage participation in that scheme they will be afforded 2.5c per pharmaceutical benefit. It is my understanding that about 37 per cent of pharmacists are now preferring to take up that option. That figure has increased from 11 per cent. The PRESIDENT —Order! It being 3 p.m., pursuant to order the Senate will now proceed to questions without notice. Senator Walters-Mr President, I wish to make a personal explanation following Senator Crowley's speech. I claim to have been misrepresented. The PRESIDENT —Order! I suggest that that be done after Senator Crowley finishes her speech. STEEL INDUSTRY: INDUSTRIAL DISPUTES Senator LEWIS —My question is directed to the Minister for Finance both as Acting Minister for Industry, Technology and Commerce and as Minister representing the Minister for Industrial Relations. Is the Minister aware that the Steel Industry Authority reports that time lost through industrial disputes in the steel industry more than doubled last financial year; and at Port Kembla the situation in the June quarter was much worse than during the three years before the start of the Government's steel industry plan; and that there has been what the Authority describes as `an alarming downturn in productivity'? Is the Minister further aware that during the June quarter productivity per employee dropped below the level set as an initial target almost four years ago as part of the unions' commitment to the plan? What action will the Government take to ensure that the union movement fulfils its obligations under the steel industry plan? Also, how, in these circumstances, can the Government justify abandoning its promise to introduce a more effective system of enforcing decisions of the Australian Conciliation and Arbitration Commission? Senator WALSH —Senator Lewis said, among other things, that in the June quarter of this year the industrial record in the steel industry was worse than it was before the steel plan commenced. He asked whether I knew that. I did not know that that was the case. But, although I am not sure of the facts, that does not necessarily mean that that was worse than it was in 1982 in the pre-accord days. I was aware of most of the other facts that Senator Lewis mentioned; that is, that the industrial record during the June quarter was certainly not good and that there had been a substantial decline in productivity compared with the, by Australian standards, high levels which had been achieved in 1985. I was asked what the Government can do about it. Firstly, I agree that it is deplorable that, after the company has met its obligations in terms of investment-indeed, in terms of quantity it has more than met its obligations under the plan-and the Government has met the obligations it accepted in 1983, the work force is actually letting the agreement down. I think that is very bad. If the people concerned are interested in keeping their jobs, they had better lift their game in comparison with what it was in the June quarter. Other than that, what governments can do is certainly not helped by examples set by groups in the community such as the doctors union in the Australian Capital Territory which is going for a 69 per cent pay increase and which, with the active support of a number of members of the Liberal Party of Australia, has been running an industrial campaign for six months based on work bans. It is difficult in circumstances where the doctors union is going for a 69 per cent pay increase and running an industrial campaign based on work bans in support of it, for moral suasion to be particularly effective, particularly when it is directed against people who earn a great deal less than do the members of the doctors union in the Australian Capital Territory. Equally relevant in that context, of course, is the unequivocal statement this morning by an official of the New South Wales doctors union that the doctors union would support any general practitioner in New South Wales who charged $30 for a standard consultation. That, of course, is an unashamed expression of support for the unbridled greed of certain right wing ideologues who unfortunately presently dominate the doctors union in New South Wales. Senator SCHACHT —My question, which is to the Minister representing the Treasurer, relates to comments made by Senator Stone yesterday afternoon regarding the workings of the foreign exchange market. Does the Minister recall that Senator Stone asserted that recent developments on the foreign exchange market provide clear evidence that a large capital outflow from Australia has been taking place and that a substantial shift in economic policies is therefore called for? Can the Minister indicate whether that assertion is valid? Senator WALSH —Yesterday in the debate on a matter of urgency, Senator Stone said: . . . if the Reserve Bank of Australia was buying, as it certainly was, massive amounts of Australian dollars-amounts of $2 billion were even mentioned-somebody must have been selling them . . . The only people who could have been were those withdrawing capital from Australia. The first part of that quotation is self-evidently true. If the Reserve Bank of Australia was buying dollars, somebody had to be selling them. However, the second assertion-that is, the only people who could have been selling were those withdrawing capital from Australia-is both theoretically flawed and, I believe, empirically erroneous. If it is not entirely true it is almost entirely true that in the days of rigid currency controls and international currency transactions heavy buying by the Reserve Bank would have signalled, if not absolutely close to absolutely, that capital was being withdrawn from Australia. That was the system with which Senator Stone was familiar and which, as Secretary to the Treasury, he was very eager to preserve, in spite of the free market rhetoric which he used to mouth at that time about all the regulations that he as the Treasury Secretary was not involved in enforcing. However, we now live in a different world. Under the present system, exporters can choose when they want to convert their foreign exchange into Australian dollars. An exporter who believed that the Australian dollar exchange rate was going to rise, as probably most exporters did a couple of weeks ago, would have an incentive to convert as quickly as possible in order to get a more favourable conversion rate. Likewise, importers can now choose the date on which they purchase the foreign exchange which they need to pay for their imports. But if the mood of the foreign exchange markets switches from expecting the Australian dollar to rise to regarding it as having been too high, and therefore falling or likely to fall further, there can be expected to be a quite dramatic surge of foreign exchange buying which is completely unrelated to any withdrawal of capital from Australia in the sense of hot money leaving the country, or equity in Australian companies owned by foreigners being sold. Senator Stone —Leads and lags constitute hot money, Minister. Senator WALSH —Senator Stone said that the only people who could have been selling dollars to the Reserve Bank were those withdrawing capital from Australia. I repeat: While that may have been true in the highly regulated interventionist empire in Treasury over which Senator Stone presided for a number of years, we now live in a different world. In the empire that Senator Stone knew, exporters and importers were obliged, by Reserve Bank direction, to do their currency conversions virtually as soon as possible. That no longer applies and exporters and importers can choose the time at which they do the conversions and, therefore, affect the volume of trading in Australian dollars. If both the exporters and the importers have similar expectations, as they probably did, there is a double whammy effect. I can see that Senator Stone is caught in a time warp on this issue. He is caught in time warps on other issues as well, usually far more antediluvian than the world of fixed exchange rates. If he wants to study the subject a bit further, I could make two suggestions: The first is that he seek some advice from somebody presently in the Parliament on his side of politics who has had very recent experience in the area of merchant banking and that, of course, is Professor Hewson. If he finds it too humiliating to take a tutorial from a mere meretricious player who, at one stage, flitted across the stage, I could possibly arrange a tutorial from either Treasury officials who are familiar with the new system or possibly the Reserve Bank of Australia. Senator SHORT —Is the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs aware of recent claims of fraudulent practice by persons advertising as immigration agents, including a former Queensland State Labor member of parliament? Can the Minister confirm the report in today's Press that private agencies will be used to promote, screen and select migrants under the $1.2 billion a year business migration program? How does the Government propose to guarantee the integrity of such a system to prevent the introduction of possible corruption into Australia's migration procedures and to protect the reputation of legitimate business migrants and legitimate business migration consultants? Will the only Government control be to authorise character checks and to stamp visas? If so, will the right to residency in Australia now be up for sale? Senator REYNOLDS —I thank Senator Short for his question. I am aware of the news items that he raises. Of course there is concern about some of these allegations. I am not in a position today to answer specifically the details of his question because the Minister for Immigration, Local Government and Ethnic Affairs, Mr Young, has foreshadowed a proposal to co-operate with the private sector and to carry out business migration processing by accrediting a number of private and public agencies. However, the Minister, as the Minister responsible for this matter, has the prerogative to make this announcement which he will be doing at a conference on 5 November. Senator Short will then be fully aware of the Government's proposals. Senator SHORT —Mr President, I ask a supplementary question. Did I understand the Minister to say that Minister Young has agreed to co-operate with the private sector in this regard? If that is the case, does that mean that the Minister's announcement, whatever it may be, on Thursday will constitute only the details of the question I have asked her? Senator REYNOLDS —I indicated in my response that the Minister has foreshadowed a proposal to co-operate with the private sector and that the full details will be announced by Minister Young on Thursday. Senator CHILDS —Does the Acting Minister for Industry, Technology and Commerce agree with Dr G. Hellestrand that 96 per cent of the Australian computer market and 90 per cent of the local telecommunications industry are owned by foreign transnational corporations or companies based abroad, as reported in the Australian Financial Review of 26 October? Does Australia borrow over $7 billion a year from international money markets to pay for these high-tech imports? What steps has the Government taken to encourage the growth and expansion of an indigenous information technology industry? Senator WALSH —I have some information which says that some of the figures quoted by Dr Hellestrand are substantially correct. Foreign owned firms supply over 90 per cent of the Australian market for computer and communications equipment. However, not all that equipment is imported. Foreign owned firms are also major producers of information technology equipment in services in Australia. It is not correct that Australia borrows $7 billion a year to pay for imported information technology products. But we run a trade deficit of around $4 billion, which is the outcome of a high level of imported hardware and the rather low level of exports, around $140m. The Government recently has taken effective steps to encourage the growth of the Australian information technology industry by announcing, in early September, a far-reaching information industry strategy which is largely aimed at rapidly boosting exports of these products to at least $1.5 billion, or around 10 times the current level, by the mid-1990s. An important element of that growth will come from the export of local products by large international companies, facilitated by the corporate citizenship scheme which has received wide media coverage. To date, six of those companies have undertaken to lift exports by $300m within seven years, and local companies will be the major beneficiaries of that expansion. Senator MACKLIN —I refer the Minister representing the Minister for Foreign Affairs and Trade to the Australia-Japan Foundation, a body which is vested under the control of the Minister for Foreign Affairs and Trade by the Australia-Japan Foundation Act 1976. Is it a fact that the Minister sought advice from the legal division of the Department of Foreign Affairs and Trade on the best way to abolish or dissolve the Australia-Japan Foundation? Is it not a fact that the Minister's office was furnished with that advice in a minute from the Department, dated 11 September 1987? What was the advice? When will the Government finalise its decision on the future of the Foundation and make public that decision? Can the Minister explain why, at a time when Australia's chronic trade deficits continue to fuel Australia's foreign debt, the Government should consider abolishing one of the very few organisations designed to foster cultural and commercial contacts with Australia's largest trading partner? Senator GARETH EVANS —I have no brief on that matter. I will refer it to the Minister and seek an early reply. Senator JONES —I ask the Minister representing the Attorney-General whether his attention has been drawn to a report in the Sydney Morning Herald of 3 November 1987 which draws attention to evidence given to the Fitzgerald Commission of Inquiry into Possible Illegal Activities and Associated Police Misconduct that the Queensland Police Commissioner, Sir Terence Lewis, may have taped all telephone calls to his office. Would such activities contravene the provisions of the Telecommunications (Interception) Act? Senator TATE —My attention has been drawn to an article in this morning's Sydney Morning Herald where it is reported that a Mr Noel Dwyer, one-time head of the licensing branch in Queensland-I think between 21 January 1980 and 17 September 1982-in evidence before the inquiry said that he assumed that it was the practice in the Police Commissioner's office to tape all calls, as he said, `mainly for accuracy'. I stress that Mr Dwyer is making an assumption and the weight of that evidence, of course, is still to be assessed. It may be of interest to honourable senators to know that under the Telecommunications (Interception) Act 1979, it is unlawful for any person to listen to or record a communication passing over the telecommunications system without the knowledge of the person making the communication. If a communication is listened to or recorded after it emerges from the telecommunications system, for example, by means of a tape recorder not attached to the telephone which picks up sounds that have left the handset, an interception for the purposes of the Act probably does not occur. I do not want to give a legal opinion on this set of facts. If the report is accurate, it is possible that the Queensland Police Commissioner has engaged in activity constituting interception for the purposes of the Act. The Australian Federal Police, if more information comes to light, may be in a position to investigate any contravention of the Act. Senator PUPLICK —I ask the Minister for the Environment and the Arts, Senator Richardson, since he has had 24 hours notice of this question and in the light of his assertion that figures relevant to overseas trips and expenses are well known, whether he can now provide for the Senate the cost of the trip currently being undertaken by his senior Minister, Mr John Brown? Will it be greater or less in cost than the average $1,658 per day incurred by Mr Brown's trips between March 1983 and June 1986? Will it involve expenditure on meals and accommodation greater or less than the $592 per day spent by Mr Brown in 1984? During his 15 days will car hire cost be more or less than the $10,476 spent for 18 days in Los Angeles in 1985? Will the cost of this trip exceed the all time record set by Mr Brown in 1983 when his trip cost $69,531? Finally, while the Minister is in Egypt will he be apologising to the Egyptian authorities for the failure of his Government or its agents to respond to the offer made by the Egyptian Government to send the fabulous Rameses II exhibition to Australia during our bicentennial celebrations? Senator RICHARDSON —I have been asked a number of questions. I did not get them all down, but I think I got the drift. I would like to take the Senate through Mr Brown's trip so that we all know what Mr Brown is doing. There seems to be some interest in the subject. So, sit back, take it easy, here I go. During the Prime Minister's visit to Egypt earlier this year, the Egyptian Prime Minister and the Minister for Tourism and Aviation sought Australian assistance in encouraging tourism in Egypt. Egypt, as I am sure all honourable senators will be aware, faces enormous economic problems, partly due to the collapse of tourism in the past few years. There are a number of factors inhibiting tourism to Egypt and the Egyptians are conscious that their international marketing needs to be improved. Egypt is a vital market for Australian wheat, again as I am sure all honourable senators will be aware. Therefore, it is decidedly in Australia's best interests to respond in a positive way to Egypt's request. Since the Minister's arrival in Cairo there have been lengthy discussions with senior officers of the Tourism Ministry and with the Minister for Tourism, Dr Sultan. On behalf of the Prime Minister, Mr Brown formally invited Dr Sultan to visit Australia to discuss tourism developments. Mr Brown also advised Dr Sultan that he would take up with Qantas Airways Ltd the possibility of that airline using Cairo as well as Bahrain as a stopover on the way to London. Early tomorrow Australian time Mr Brown will meet the Egyptian Prime Minister, Dr Sidqi, to discuss both trade and tourism issues and the possibility of signing a memorandum of understanding between the two countries. I think the important thing to note is that this is an official visit paid for by the Egyptian Government and formally requested by it. Senator Ryan —Apologise! Senator RICHARDSON —We have not finished yet. I turn to the Minister's visit to Japan, which also seems to have aroused some interest. Mr Brown is leading a tourism investment mission and on that mission there are 19 senior industry executives led by the Chairman of Tourism Australia, Mr John Haddad, who will assist Mr Brown as deputy leader of that mission. I shall table for honourable senators if they are interested a list of those senior executives. Senator Robert Ray —Read the list. Senator RICHARDSON —Do not tempt me. I shall table the list of the senior executives who are accompanying Mr Brown. The mission members are paying all their own costs. But more than that, it should be noted that all members of the mission put in $300,000 to fund not only meals, cars or whatever, but the seminars and the documentation that will be handed out to prospective Japanese investors. Such a demonstration of confidence not only in the Australian Government but in the Minister responsible, Mr Brown, is something of which we should all take considerable note. Unlike those opposite who carp and criticise, the industry is interested in getting on with the job, and that is what Mr Brown is all about. Mr Brown is having two whole days in London during which time he will hold a series of meetings with regional directors of Tourism Australia. I would have thought that when one looks at what Mr Brown is doing over this 15-day period, one could only regard this trip as arduous. It is being undertaken, as usual, with the interests of Australia in mind. We should all express our gratitude to Mr Brown, not only for undertaking this arduous exercise but also for all the exercises that he has undertaken in the last few years. At the end of that period we can now look at an industry that is providing 6 per cent of our employment and 6 per cent of gross domestic product-an industry that was totally ignored by Fraser-Howard governments, banished to the boondocks as a mere branch of another department, but uplifted and put in its proper place under the leadership of John Brown. Yesterday I mentioned the 100 per cent increase in visitor arrivals that has been achieved while Mr Brown has been the Minister. On the question of whether Mr Brown's costs will exceed $69,531, it should be noted that the costs are not all in yet. I imagine that it would take some little time before they are. The responsibility for releasing those figures in due course rests with my colleague the Minister for Home Affairs, Senator Robert Ray. I am sure that he will be only too pleased to do so when those figures are available. When they are available, all they will demonstrate, once again, is the superb leadership which Mr Brown has shown in an important industry, made much more important by his interest and his actions. Senator PUPLICK —Mr President, I ask a supplementary question. Since the Minister asserts that he cannot say what the cost is but that it is likely to be zero, or at least that Mr Brown's expenses will have to be borne by one of the poorest countries in the world, will the Minister now respond to the last part of the question that I asked, which relates to tourism with Egypt? Since the Minister has asserted that the purpose of this trip is to promote tourism from and in Egypt, can he now say why his Government was derelict in not properly responding to the offer made by the Egyptian Government to send one of the most important archaeological exhibitions in the world to Australia to promote tourism? Is it true that the Egyptian Government, having made this very important and generous offer and having received no adequate response whatsoever from the Australian Government, has been saddled instead with a visit by Mr Brown? Senator RICHARDSON —I repeat my answer for Senator Puplick, who obviously sometimes has difficulty in hearing. I will say it as slowly as I possibly can. Senator Robert Ray —In Egyptian. Senator RICHARDSON —No, I will not speak in Egyptian. This visit was formally requested by the Egyptian Government. Senator Peter Baume —That was not the question. Senator RICHARDSON —I am sorry, that was part of the question. There was a long preamble, Senator Baume, as there always is with Senator Puplick. This was a visit formally requested by the Egyptian Government to which Mr Brown, on behalf of the Australian Government, has very properly responded. Insofar as the purpose of the visit is concerned, I have made it clear that the Egyptian Government is particularly interested in securing the knowledge and the expertise of Mr Brown relating to the problems that it has had with the international marketing of Egypt as a tourist venue. That is what I said earlier, but apparently Senator Puplick did not hear me. As far as the exhibition is concerned, all I can say is that I will refer that question to my colleague who is in charge of the Bicentenary and seek an answer for Senator Puplick at some stage in the future. Senator CROWLEY —Does the Minister Assisting the Prime Minister for the Status of Women and for the Bicentenary agree with recent calls for major changes to school curricula to address the low participation of girls studying maths and science? Does the Government plan to introduce any initiatives to increase the retention rate of girls in the study of maths, science and technology subjects? Can the Minister tell the Senate whether such initiatives will support and expand the success of the Government's affirmative action strategies? Senator RYAN —The Commonwealth Government has been working for some years on strategies to improve the participation of girls in science, maths and technological subjects. As a part of the major effort we have made in that direction we have concluded recently with the States and with the major non-government school systems a national strategy for the education of girls which will involve all major school systems taking steps to improve participation by girls across the curriculum but particularly in the science and maths areas and their reporting annually on the results that they have achieved by those methods. The fact that the States and the major non-government school systems are prepared to be involved in a systematic evaluation and measuring, with publication of the results, is a real breakthrough because it is not always easy to achieve that degree of concentration and that systematic examination of what is actually happening in our schools. As well as that we have undertaken a number of special initiatives. The most recent is a $1m project which is designed to increase the retention of girls in those subjects. Over two years this project will be directed towards refining and publishing existing curricula material, assisting in the development of materials already in production and developing new materials and strategies. The benefits of this concerted effort for girls in science subjects will be far-reaching. As Senator Crowley's question suggested, it is crucial that we get a better result in girls' participation in science and maths if the new opportunities in employment and training that are being opened up as a result of the affirmative action legislation and other employment policies of our Government are to make a difference. The legislative and policy changes have been put in place. Opportunities now exist for girls and women in a variety of careers which never existed before. So that they will be able to take advantage of those legislative and policy improvements it is necessary that there be a dramatic change in the curriculum choices of girls. The involvement of girls in the science and maths project, the $1m a year project I have referred to, is an example of the kinds of steps the Commonwealth is taking. Senator WALTERS —My question is directed to the Minister for Finance. Last Thursday, during debate on the Medicare Levy Amendment Bill in the Senate, Senator Walsh said: Total spending on health as a proportion of gross domestic product (GDP) in Australia has declined in recent years, albeit marginally. It currently stands at around 7 1/2 per cent of GDP. Can the Minister say where he got that figure? Was it a current figure for 1987-88? Senator WALSH —I would have thought that even Senator Walters would be able to work out that one cannot give outcome figures for 1987-88. Not only would one have to be clairvoyant; one would have to be infallibly clairvoyant to know what the outcome figures for 1987-88 will be. I am not sure what financial year it was. I think it was 1986-87, or it may have been 1985-86. Over a two-year period total health spending as a proportion of GDP fell from 7.52 per cent to 7.48 per cent-a decline, albeit, as I said, marginal. That was the outcome of a study done by a joint interdepartmental committee of the Department of the Treasury, the Department of Finance and the Department of Health. The Health Insurance Commission may also have been represented. I am not certain. Senator Stone —Was that the one headed by Dr Deeble? Senator WALSH —I cannot say. I presume that as Senator Stone chose to make that interjection he assumes that Dr Deeble has the same sort of blind ideological prejudice that Senator Stone so frequently displays, including not updating his knowledge of the foreign exchange markets since he presided over the very tight, highly regulated little empire back in the days before the market was deregulated. It is unpleasant, I know, for people like Senator Walters and Senator Stone when the facts collide with ideological prejudice. The facts that I have just given are an example of that. Since the Medicare policy settled down, total health spending as a proportion of GDP has actually fallen. The same study from that joint committee also showed that total health spending in the United States equals 11 per cent of gross domestic product. If total health spending in Australia were to rise to that level, it would require about an extra $10 billion-for a health service delivery outcome which most people in the United States would regard as inferior, and certainly only the blindest, most obsessive bigots would regard as superior. The very bad, very cost inefficient outcome in the United States is a function of two things: the Federal Government picks up the entire bill for the treatment of the elderly and allows private insurance for others. In other words, that would be the outcome of the very policy which the ideological bigots of the Liberal and National parties would inflict on Australia if they were given the opportunity to do so. Senator WALTERS —I ask a supplementary question, Mr President. As the Minister is unable to remember the year for the figures which he cited, although he said they were current figures, could he please give me, before the end of Question Time, the year for which he was citing figures. He said he did not know whether they were for 1986-87 or 1985-86. The Australian Bureau of Statistics tells me that only the figures for 1984-85 show the figures cited by the Minister. Senator WALSH —If they can be obtained in time, I will give the years. But I repeat that I cannot give the figures for 1987-88, and nor can anybody else. Senator WOOD —I address my question to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. Is the Minister aware of a report in the Australian Financial Review of 19 October suggesting that Australia is denying refugee status to Fijians? In the light of recent developments in Fiji, where opponents of the military regime have been subjected to psychological and physical torture, is this refusal of the Government to grant refugee status to victims consistent with our recognition of the importance of defending human rights? Has the Australian Government received requests for the refugee status from Fijians who have been mistreated in Fiji? Senator REYNOLDS —I advise Senator Wood that, yes, the Australian Financial Review article of 19 October did state that Indian Fijians would be treated like any other refugee or migrant applicants. Secondly, allegations that opponents of the military regime have been subjected to psychological and physical torture are under active investigation. Since the first coup in Fiji earlier this year, the Department has received 14 formal applications for refugee status from Fijians. Two have been rejected and the other 12 are currently under consideration. I undertake to advise Senator Wood accordingly. Senator ARCHER —I direct my question to the Minister for the Environment and the Arts. I refer the Minister to his recent announcement that Australia would have its own Antarctic vessel by 1990. Is it not true that the Government took 2 1/2 years to reach this decision? Is it a fact that it had been expected that the 26-year-old Nella Dan would conduct its last expedition in the summer of 1987-88? As evidence of this, I quote an answer given to Estimates Committee A on 18 May this year when it was stated: It is hoped that the replacement for the Nella Dan will be available for service by the 1988-89 season. Is it a fact that the delay in the Government's decision means that the Nella Dan will now have to be recommissioned for the 1988-89 expedition at a likely cost of more than $2m? Is it a fact that the Director of the Antarctic Division recently described the Nella Dan as `dangerous' and explained that last season she only narrowly escaped being `run over as if it were a toy' by an iceberg, a commodity in some abundance in the Antarctic area? What excuse does the Minister have for unnecessarily placing at risk the lives of Australian scientific expeditioners to the Antarctic for the next two years, particularly in the 1988-89 season? Senator RICHARDSON —What Senator Archer obviously needs to know is that the Nella Dan was recently refurbished at a cost of $1 1/2m to enable it to continue. We are informed that the owners are confident that it can continue to perform its duties until a replacement vessel is ready. Were that not the case, given the safety aspects of the issue, the Government obviously would not be in a position to continue to run it. However, because of the information we have received, we are confident that the need for a vessel can be held off until the 1989-90 season. To that end I will be making a Cabinet submission within the next month, and I hope we can announce very shortly thereafter the results of it. The Government will have before it a number of options. It is probably not productive to canvass all of them now, given that some of my colleagues may have different views, but I will inform Senator Archer at the earliest possible moment of our decision. Senator BLACK —My question is addressed to the Minister for Finance. Has the Minister received proposals for adjustment to fiscal policy settings in the wake of recent events on world stock markets? What is the nature of these proposals, and will the Government be implementing them? Senator WALSH —There have been calls from various Liberal Party and other party spokesmen, such as Mr Howard, Mr Peacock and Mr Elliott, as well as Senator Stone, for a mini-Budget to be brought in before the evidence upon which any mini-Budget or economic policy adjustment could rationally be based is available. That, of course, is consistent with the propensity of at least some of the people I have mentioned to determine policy, not after examination of the facts and the evidence, but in accordance with ideological preconceived conclusions. They may differ to some extent in that propensity, but what they all have in common is an inability, or a refusal, to address the details of the expenditure cuts that they are continually calling for. The Liberal Party still has a $2.5 billion plus gap in expenditure cuts arising from the last election campaign, to which it ought to add any other expenditure cuts which it proposes to make or believes should be made. Mr Howard promised the Australian Broadcasting Corporation (ABC) on Tuesday of last week that he would supply it with a list of expenditure items which the Opposition believes should be cut. I have also asked Mr Howard to supply such a list to me. He did not promise one to me, so I suppose I cannot really complain too much about that. But he did promise one to the ABC, and I presume he has now welshed on that promise as, of course, he has become accustomed to welshing on promises in the past. Mr Elliott, if not on the expenditure side at least on the revenue side, has shown a glimmer of fiscal responsibility. This leaves aside, of course, the question of whether one agrees with his policy proposal, but he does display some fiscal responsibility in calling for a broad-based consumption tax, which is absolutely essential if the Liberal Party is to continue to offer lower marginal tax rates while simultaneously proposing to increase expenditure by, for example, paying pensions to millionaires. I also note, with some satisfaction, I suppose, an indication, albeit a pretty weak indication, that Mr Peacock also has not ruled out the possibility of a broad-based consumption tax. This suggests at least-I say again, whether or not one agrees with a broad-based consumption tax as a policy-that the Opposition is acquiring a skerrick of fiscal responsibility, which it did not have during the recent election campaign. Senator CHANEY —My question is addressed to the Minister representing the Minister for Industrial Relations. I note the Minister's apparent preparedness to answer questions about the Opposition and not about the Government. Is the Minister aware that, despite the Government's lack of action, the claim for $20 a week severance pay in the building industry is to go before the Full Bench of the Australian Conciliation and Arbitration Commission? Will the Government make a submission to the hearing opposing the severance pay claim, which is clearly in conflict with the national wage fixing principles? I also ask, in light of the Minister's apparent claim of being able to answer questions about the Opposition: When will I receive an answer to the question I asked him last week on this same issue, and why did it take a month to get a reply on an earlier question from me on the same matter? Senator WALSH —Mr President, Senator Chaney would have us compare unlike things. My references to the Opposition are taken from the public record. Mr Elliott is unequivocally on the public record as supporting a broad-based consumption tax. Senator Stone-admittedly two years ago, before he acquired his present position-also unequivocally supported a consumption tax. Senator Parer —And Mr Keating. Senator WALSH —I went into that yesterday. I will do it again if the honourable senator wants me to. Of course, it is a well known fact that the Treasurer was in favour of a broad-based consumption tax in mid-1985. That option was investigated in considerable detail by the Government over a considerable period. In the end, a decision was made not to proceed with it, principally for two reasons: firstly, a fear by some people-- Senator Chaney —Mr President, I raise a point of order. I know that there is nothing in the Standing Orders about prolixity, but the Minister is simply repeating what he said yesterday and he is totally failing to address the question which has been asked. Mr President, I know you are not in a position to direct the Minister on how to answer the question, but he is in no way directing his answer to the matters which I have raised. I would ask you to direct the Minister either to direct his remarks to the question or to sit down. The PRESIDENT —Yes, I would ask the Minister to answer the question that was asked by Senator Chaney. Senator WALSH —Certainly, Mr President. But, in mitigation, I think that when members of the Opposition invite one to comment on other matters, one is entitled to take some liberties. But, in respect of the consumption tax, if anybody wants to know the rest of the details, I refer him or her to the Hansard of, I think, yesterday-although it may have been last week; I am not too sure. The point, however, is that a number of people in the Opposition or the Liberal Party machine-occupying important positions such as President of that Party-have put on the public record their views on some of these things. Although I do not have a copy with me at the moment, I know that Mr Willis has put on the record some views which I believe could accurately be described as being critical of the severance pay claim or demand which is being pushed by some of the building industry unions. So far as I know, he has not made a statement on what submission, if any, the Government will be putting to the Commission when it hears this case, although I would expect that the Government will be making a submission. I will contact Mr Willis and see whether he is willing, at this stage, to make public the content of any such submission. Senator AULICH —My question is directed to the Minister representing the Minister for Industrial Relations. Has the Minister noted comments made today by Dr Michael Nicholson, legal secretary of the New South Wales branch of the Australian Medical Association (AMA), that that organisation had recommended a $30 fee for a standard consultation and will `stand by any doctor who chooses to charge it'? I might add that $30 is significantly more than the $21.50 recommended nationally by the Australian Medical Association yesterday. What are the Government's schedule fee and the Medicare rebate for a standard consultation? Is the position of the New South Wales branch of the AMA on doctors' fees consistent with the Government's wages policy? Senator WALSH —The answer to the last part of the question is unequivocally no; the New South Wales AMA's position is not consistent with the Government's wages policy, nor indeed with a wages policy which any responsible Opposition would support. The AMA has recommended a standard consultation fee of $21.50, which I note is an increase of around 7 1/2 per cent, with no increase in productivity, as against expected wage increases for wage earners this year of, depending on which way one would like to measure it, either 6 per cent or 6 1/2 per cent, a great part of which, if not the greater part of which, is supposed to be funded by increased productivity. The AMA, at a national level, is going for a 7 1/2 per cent pay increase with, by definition, no increase in productivity. So it could be argued that even the AMA nationally is acting in a manner which is inconsistent with the Government's wages guidelines. The New South Wales branch of the AMA, or the doctors union of New South Wales, is and has long been both greedier and more irresponsible than the national organisation. It has fallen under the control of a bunch of right wing ideologues who are as interested in pursuing their own political agendas as they are in anything else, with the possible exception, of course, of padding their own wallets. The Government's schedule fee is $17.60. The fee which has been recommended by the New South Wales branch-and the New South Wales branch of the doctors union says it will support all doctors who charge a fee of $30-is getting on for double the schedule fee. The effect of that grossly irresponsible statement, which is derived from the unmitigated greed of that organisation and the people who have taken control of it, if it were to flow through to the community generally, would be economically disastrous. If the doctors union and its various branches, particularly the Australian Capital Territory and the New South Wales branches, cannot, of their own volition or with a bit of moral persuasion from the Government, be persuaded to show a bit of economic responsibility, it is about time that they were roundly denounced by those members of the Opposition who call for wage cuts for everybody else. Senator PANIZZA —Is the Minister representing the Minister for Land Transport and Infrastructure Support aware that if the formula used for road grant distribution under the report of the Cameron Independent Committee of Inquiry into the Distribution of Federal Road Grants is fully implemented after 1989-90, and if the Federal Government continues its practice of the last three years of maintaining road funding in nominal terms only, by 1994-95 country municipalities in Western Australia will receive less than one-third of the Federal road grants they received in 1985-86, in 1985-86 dollar terms, and that there will be a loss of more than 1,200 jobs dependent on the industry in country Western Australia? Will the factors used to distribute road funds under the Cameron report be modified to include recognition of the social factor associated with access to property and dependency of many smaller country towns on the roads industry? Senator GARETH EVANS —I am sure that my colleague Mr Duncan would be happiest if, rather than winging it, I were to take the question on notice. I will do just that and let the honourable senator know as soon as possible. Senator BURNS —My question is directed to the Minister for Local Government. Is there any truth in the statement made by Senator MacGibbon in this chamber last week, and recorded in Hansard, that every one of the local authorities in a particular north Queensland region have written repeatedly protesting at the treatment given to them by this Government regarding World Heritage listing? Senator Stone —Mr President, I raise a point of order. Will the Minister table the answer she is about to read, thereby saving the time of the Senate? The PRESIDENT —Order! There is no point of order. I call the Minister. Senator REYNOLDS —Although Senator Stone is a senator for Queensland, or is supposed to be, it does not surprise me that he is not interested in my answer relating to the north Queensland region. I did, in fact, send him a map of Queensland and some other information. I am not sure whether he has yet had an opportunity to use those resources. I find it quite extraordinary that Senator Stone, as a representative of the people of Queensland, would not want to hear the information that I am ready to provide to the Senate. Furthermore, I would have thought that, with the Queensland National Party conference due to start in Townsville tomorrow, he would have been only too eager to hear what the response of local councils has been to the initiatives of Senator Richardson and me. Earlier last week, in answer to another question by Senator Burns, I indicated that I had been working very closely with Senator Richardson and his Department with regard to the input local councils can have on the impact of World Heritage listing. I commended local councils on their important contribution and on the fact that they were prepared to talk to the Federal Government, to Senator Richardson and me and to officers of my Department and Senator Richardson's Department over the last few weeks. I would like to detail, especially for the benefit of Senator Stone, some of the results of that ongoing, very positive consultation. Recently departmental officers met with some 14 local councils, five regional organisations and four Aboriginal communities for consultations; many positive suggestions were put forward. The main purpose of the consultation was to listen to their concerns in relation to World Heritage listing-both Senator Richardson and I have acknowledged this fact-to obtain information on areas of possible alternative employment and to engage extensive support for a self-help approach to adjustment. Senator Archer —This is tripe. Senator REYNOLDS —I think I heard an Opposition senator say that this was tripe or trite. In either event I can assure the honourable senator that it is certainly neither trite nor tripe to the people of north Queensland. All senators on this side of the chamber are very interested in the people of north Queensland. Detailed submissions-- Senator Archer —This is boring. Senator REYNOLDS —I am sorry that Opposition senators are bored by the very positive response that we have received from north Queensland councils. Perhaps the bored Opposition senators would care to leave the chamber and have afternoon tea. Detailed submissions are being received from some councils and information will be included in a final regional plan. All councils co-operated in the consultation process. Submissions have been received to date from Townsville City, Johnstone, Eacham, Herberton and Mulgrave shire councils; that is particularly for Senator Boswell's information. All councils have co-operated in the consultation process and all but two-Thuringowa City and Cardwell-supplied information on possible short run employment generating projects for their areas. All councils provided information on long term employment projects. Eight councils supported a regional adjustment strategy and three councils-Hinchinbrook, Douglas and Cook-have yet to form a view on any such approach. One council-Thuringowa-was definite in its opposition to the regional adjustment strategy although the Townsville Thuringowa Regional Development Bureau was in favour of it. The remaining council-Dalrymple-did not see a need for the involvement due to the only marginal impact of the listing. Later this afternoon I will be presenting a full report on the outcome of these consultations to Senator Richardson for his consideration. I would welcome the opportunity for Opposition senators to consider the very positive views of a number of local councils. Senator Messner —Mr President, in the light of the length of that reply, can we have the document tabled? The PRESIDENT —Will the Minister table the document? Senator Reynolds —I am quite happy to table the document. Senator SANDERS —Is the Minister representing the Minister for Foreign Affairs and Trade aware of claims of environmentally and culturally damaging mining of gold in the Solomon Islands to supply an illegal smuggled gold trade to Australia, as reported in the Solomon Islands Press? Has the Minister or any other Government Minister discussed this issue with representatives of the Solomon Islands Government? What action is being taken to investigate these claims and stop the smuggling, by Customs or other procedures? Are any Australian-owned companies, or companies with Australian shareholders, links or control, exploring for, or mining, gold in the Solomons? If so, what are their names and where in the Solomons are their activities? Senator GARETH EVANS —Another day; another conspiracy. Nonetheless, I have some information from the Department of Foreign Affairs and Trade which I think answers Senator Sanders's concerns. We are aware of an increase in gold prospecting in the Solomon Islands, particularly centred on Gold Ridge near Honiara. Most prospectors are local Solomon Islanders. Their efforts in 1986 resulted in a modest but welcome addition to export earnings of more than 2 million Solomon Island dollars. Despite the efforts of panners, and notwithstanding promising signs, no treasure troves yet have materialised. We are aware of reports in the Solomon Islands Press on gold mining, claiming, as Senator Sanders suggests, that there is an illegal gold smuggling trade to Australia. Some land- owners have called for new mining regulations to increase their share of the benefits and ensure environmental protection of mining areas. The Solomon Islands Government, however, has not raised any of these issues with us. We see it as a matter for the Solomon Islands Government to pursue as it sees fit. We are aware that the Solomon Islands Ministry of Natural Resources has said that it has no evidence of large-scale gold smuggling, although undoubtedly the practice has occurred. Normal Customs procedures apply. As to the last part of Senator Sanders's question, at last count there were about a dozen companies, either Australian or with major Australian content, looking for gold in the Solomon Islands. These companies work under the umbrella of the Association of Mining Exploration Companies. They include Zanex, Cyprus/Arimco, BHP, Dominion, Newmont, Aurex/Nuigini Mining, Solex, Kia Ora, Solminex, Solomon Pacific and Magnum. Only one of these companies, Zanex, is actually mining gold. It has a small joint venture operation with a Solomon Islands company called Mavu, to mine alluvial gold at Gold Ridge near Honiara. One other company, Cyprus/Amrico, is drilling in the same area and may begin a small mine in the not too distant future. All other companies are involved only in prospecting and have special prospecting licences issued by the Solomon Islands Government, covering most of the Solomon Islands. Senator RYAN —During Question Time, Senator Puplick, amongst the many parts of the question he asked Senator Richardson, raised the matter of an exhibition from Egypt for the Bicentenary. I have some information which will correct the misapprehension which Senator Puplick seemed to be under when he asked that part of his question. There is to be an Egyptian exhibition in Australia for the Bicentenary. It is not called the Rameses Exhibition but the Gold of the Pharaohs Exhibition. The exhibition was announced during the Prime Minister's visit to Cairo in February this year as Egypt's contribution to the Australian Bicentenary. It was welcomed by the Prime Minister at that time. The exhibition has developed from negotiations with Egyptian authorities that were undertaken by the Australian Ambassador to Egypt and Mr Bob Edwards, the Director of the Museum of Victoria and a member of the Board of the International Cultural Corporation of Australia (ICCA). Mr Edwards has recently returned from Egypt and is due to make another visit to finalise the content of the exhibition. The exhibition will be managed by the International Cultural Corporation of Australia, a private company established by the Commonwealth in 1980 to manage international exhibitions of cultural property. The ICCA has responsibility for negotiating the exhibition content and the fee to be paid to the Egyptian authorities. The exhibition will be shown in a number of venues between July 1988 and May 1989. It is likely that indemnification will be provided for the exhibition under the Commonwealth indemnification scheme, administered by the Department of the Arts, Sport, the Environment, Tourism and Territories. Senator RYAN —Yesterday, Senator Bishop sought detailed information about the national women's organisations which have received operational grants through the Office of the Status of Women. She asked specifically about the grant to the Australian Council of Trade Unions Working Women's Centre. She also sought statistical information on membership of the organisations which have received grants. I have a lengthy answer that provides the information sought by Senator Bishop. I seek leave to have the answer incorporated in Hansard. Leave granted. The answer read as follows- Background The Working Women's Centre was originally established with an International Women's Year grant for $40,000 to the Australian Council of Salaried and Professional Association 1975. Successive Governments have recognized the vital role that the Centre has played in promoting equality in the workforce. It has been the recipient of a series of grants-in-aid since 1977, which have consistently been far larger than other grants paid to women's organisations. Approval has been granted annually to allow payment of a grant-in-aid ($40,000 since 1983/84 and the real value of this grant has fallen by 31 per cent between June 1983-87) to the Centre from the allocation for operational grants made under the NCAP. The grant carries a set of terms and conditions approved by the departmental auditor. Current Situation The audit report from the ACTU Working Women's Centre indicates that the majority of the grant it used for the co-ordination of the Action Plan for Women Workers (attached). The Action Plan is an excellent source of projects which could be developed to assist women workers. The Plan includes such issues as: Women's right to work Workers with Family Responsibilities Comprehensive child care Equal remuneration for work of equal value Superannuation EEO and Affirmative Action Increased involvement of women in the trade union movement. Some of these issues were also identified as major concerns during the consultations on the National Agenda for Women. National Consultation and Assistance Program Under the National Consultation and Assistance Program, funds were provided to organisations and individuals for programs and projects to advance the status of women in 1986-87. As part of the program, assistance is provided to member organisations of the National Women's Consultative Council to consult with women on topics referred to them by the Minister Assisting for the Status of Women. $80,000 was allocated in 1986-87-$5,000 each to 16 organisations and individuals. Operational grants are provided to national women's organisations to assist with administration costs and improve their capacity to do research and consult on issues of significance to women. In 1986-87 a total of $87,500 was allocated to eight organisations: $ Member- ship National Council of Women in Australia ... 15,000 unknown Country Women's Association ... 15,000 56,000 Federation of Business and Professional Women ... 15,000 2,300 Women's Electoral Lobby ... 15,000 5,350 Young Women's Christian Association ... 15,000 unknown Union of Australian Women ... 7,500 3,000 Penguin Club of Australia ... 2,500 1,750 Sportswomen's Association of Australia ... 2,500 400 Comparison of Grants-ACTU and NCAP recipients Working Women's Centre promotes equality in the workforce for over 1 million women members. Senator TATE —On 9 October 1987 Senator Watson asked me as the Minister representing the Attorney-General the following question without notice: Are there any parts of the off-shore constitutional settlement package that remain outstanding? If so, what further proclamations are required? Can the Minister explain the reasons for the elements that are still outstanding? The Attorney-General has provided the following answer to the honourable senator's question: Of the Commonwealth legislation enacted to implement the Offshore Constitutional Settlement, only the Minerals (Submerged Lands) Act 1981 and associated Royalty, Exploration Permit Fees, Production Licence Fees, Works Authority Fees and Registration Fees Acts are currently unproclaimed. Under the Offshore Constitutional Settlement arrangements, the Commonwealth has jurisdiction over offshore mining beyond the three-mile territorial sea. Inside the outer limit of the territorial sea offshore mining is subject to State/Northern Territory jurisdiction. At present, no legislation has been enacted by any State or the Northern Territory to regulate mining within the territorial sea. I understand that a Working Group of Australian Minerals and Energy Council Officials has proposed the amendment of the current Commonwealth legislation and the enactment of complementary legislation by each State and the Northern Territory. The Minister responsible for the Commonwealth legislation is the Honourable John Kerin, M.P., the Minister for Primary Industries and Energy. If any further information is required, it should be sought from him. Senator TATE —On 26 October I provided the Senate with details of police patrols in the Belconnen area in answer to questions raised by Senator Reid in the adjournment debate on 22 October. In the adjournment debate on 27 October, Senator Reid again questioned the level of patrols in Belconnen, as well as Tuggeranong, and queried response times. In regard to the matter of response times, it is acknowledged that eight minutes is an average response time and that on occasions the response may take a little longer but I am assured that in any assessed emergency situation, the response time would generally be within eight minutes. I would also like to point out that the figures provided on 26 October were for the average number of patrols conducted over the three-week period not, as Senator Reid suggested, the number of patrols scheduled to be offered. I am advised by the Australian Federal Police that morning shift patrols, 7 a.m. to 3 p.m., are one person patrols; afternoon shift patrols, 3 p.m. to 11 p.m., are one person patrols until dark, that is, approximately 6 p.m., when they become 2 person patrols; and night shift patrols, 11 p.m. to 7 a.m., are 2 person patrols. I am also advised that 10 overtime shifts were worked in the Belconnen area during the period to cover shift shortages due to sickness. As well as the Tuggeranong and Belconnen patrols, the services of traffic branch, accident squad and legal patrols are also available to assist if required. Legal patrols are one person patrols. Accident squad patrols are one person on morning shifts and two persons during afternoon and night shifts. Mobile patrols from the traffic branch are not dedicated two person patrols at all times owing to the nature of the duties, for example, motor-cyclists and one person pursuit vehicles. Details of patrols available over the last three weeks are contained in the attached tables and I seek leave to have them incorporated in Hansard. Leave granted. The tables read as follows- Morning Afternoon Night Tuggeranong Patrols 5/10 ... 3 4 1 6/10 ... 3 4 2 7/10 ... 3 3 2 8/10 ... 3 3 2 9/10 ... 3 3 2 10/10 ... 3 3 2 11/10 ... 3 3 2 12/10 ... 3 3 2 13/10 ... 3 4 2 14/10 ... 3 4 2 15/10 ... 4 4 2 16/10 ... 3 3 2 17/10 ... 3 3 2 18/10 ... 3 3 2 19/10 ... 3 3 2 20/10 ... 3 3 2 21/10 ... 3 4 2 22/10 ... 3 3 2 23/10 ... 3 3 2 24/10 ... 2 3 2 25/10 ... 2 3 2 Belconnen Patrols 5/10 ... 4 4 4 6/10 ... 4 4 4 7/10 ... 5 6 4 8/10 ... 5 4 5 9/10 ... 6 4 5 10/10 ... 5 4 5 11/10 ... 6 4 4 12/10 ... 5 3 3 13/10 ... 5 4 3 14/10 ... 5 4 3 15/10 ... 4 4 5 16/10 ... 4 4 5 17/10 ... 4 4 5 18/10 ... 6 4 3 19/10 ... 4 4 4 20/10 ... 4 4 4 21/10 ... 4 4 4 22/10 ... 3 3 5 23/10 ... 3 4 4 24/10 ... 3 4 4 25/10 ... 5 4 4 Legal 5/10 ... 2 2 6/10 ... 3 4 7/10 ... 4 4 8/10 ... 3 5 9/10 ... 2 5 10/10 ... 4 - 11/10 ... - - 12/10 ... 3 2 13/10 ... 4 4 14/10 ... 4 4 15/10 ... 3 4 16/10 ... 2 5 17/10 ... 4 - 18/10 ... - - 19/10 ... 1 2 20/10 ... 3 5 21/10 ... 4 5 22/10 ... 3 4 23/10 ... 1 2 24/10 ... 1 - 25/10 ... - - Mobile Traffic Accident Squad M A N M A N 5/10 ... 8 6 - 4 3 1 6/10 ... 6 6 - 5 3 1 7/10 ... 6 4 - 3 3 1 8/10 ... 5 4 3 3 3 1 9/10 ... 8 4 3 4 3 1 10/10 ... 9 3 2 3 3 1 11/10 ... 16 5 - 3 3 - 12/10 ... 6 9 - 5 3 1 13/10 ... 5 8 - 5 3 1 14/10 ... 5 9 - 5 3 1 15/10 ... 6 5 4 3 3 1 16/10 ... 6 4 4 4 3 1 17/10 ... 7 3 3 3 3 1 18/10 ... 6 8 - 3 3 - 19/10 ... 7 6 - 3 3 1 20/10 ... 10 8 - 3 3 1 21/10 ... 10 9 - 3 3 1 22/10 ... 8 4 3 3 3 1 23/10 ... 8 4 3 4 3 1 24/10 ... 8 6 2 3 3 1 25/10 ... 6 10 - 3 3 1 Senator REYNOLDS —On 2 November 1987 Senator Colston asked me: Is the Government concerned that foreign nationals are taking the place of Australian workers, putting Australians out of work and on to unemployment benefits? Would the Minister's Department encourage businesses to assist Australian employees to gain sufficient language skills to serve foreign customers, rather than seek out foreign tourists to perform these duties? He also asked in a supplementary question whether I could advise: . . . how many Japanese are in Australia on working holidaymaker visas, and how many Australians are in Japan on the same type of visa? I now provide the following answer to the honourable senator's questions: the Government is concerned in any instance where foreign nationals are seen to be taking the place of Australian workers. However, with the continued expansion of the tourism industry comes more, not less, jobs for Australians. There has been talk from within the hospitality and service industry that perhaps we should focus on the language needs of those people travelling to Australia, particularly with the enormous increase in the applications being reflected in Japan itself. Obviously, a lot of people in the service industries are finding it compatible in the supply of those services to employ people who can also speak the language. The number of working holidaymaker visas issued to Japanese over the last three financial years was: in 1984-85, 1,498; in 1985-86, 1,865; in 1986-87-preliminary figures-2,897. The number of working holidaymaker visas issued to Australians was: in 1984-85, 500; in 1985-86, 550; and in 1986-87-again these are preliminary figures-598. The PRESIDENT —I inform the Senate that I have received the following letter, dated 3 November, from Senator Lewis: Dear Mr President Pursuant to Standing Order 64, I give notice that today I propose to move- `That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to bring to an end union sabotage of the steel industry plan.' Your sincerely (AUSTIN LEWIS) Senator for the State of Victoria Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator LEWIS(Victoria)(4.10) —I move: That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to bring to an end union sabotage of the steel industry plan. Last week the Steel Industry Authority produced its quarterly report for the quarter ending June 1987, and yesterday the Authority's annual report for 1986-87 was tabled in the Senate. The figures revealed in both reports indicate an appalling state of industrial disputation in the steel industry during the first half of this year in particular. The position last year was not very good when the annual report was tabled, because in October of that year Senator Button, the Minister for Industry, Technology and Commerce, commented on the rising level of industrial disputation which was revealed in the report and urged the parties to bring about a reversal of this trend. Quite correctly, he pointed out that industrial relations problems reduce Australia's competitiveness and undermine our credibility in world markets. Clearly, Senator Button's appeal has failed as the number of man hours lost has more than doubled this year. The figures reveal quite alarming statistics, as I have mentioned, and I shall quote some of those figures. I would point out that productivity has declined from an average of 286 tonnes per employee in 1985-86 to 267 tonnes per employee for the whole of the year 1986-87. In the three months to June 1987 the industry's productivity declined further to an average of 245 tonnes per employee per year, which is less than the original estimate, when the plan was introduced four years ago, of 250 tonnes per employee per annum-and that was estimated to be the absolute minimum that the steel industry should be producing in Australia. The figures show massive strikes being carried out, in particular at the Port Kembla works. For the first six months of this year at Port Kembla there were 321,088 man hours lost, a 779 per cent increase over the same period in the previous year. That figure is more than the total man hours lost at Port Kembla for the period January 1984 to December 1986-that is, the rest of the life of the steel plan. Overall, in 1986-87, 426,649 man hours were lost through industrial disputes compared with 211,294 man hours in 1985-86, an increase of over 100 per cent. I do not want to bore the Senate with figures, but these figures simply have to be stated in order to indicate the nature of the problem. They involve massive disputation, particularly at Port Kembla. I quote from the Authority's annual report: Each of the three major steelmaking centres recorded falling productivity levels in the six months ending June 1987 with total productivity falling by 11.3 per cent in that period. . . . In April 1987, the Port Kembla steelworks produced 187 tonnes per employee per annum, the worst production figures for any of the three main steelworks since before the start of the plan. Having established the position, I move on to the crucial part of this motion, and that is what the Government will do about it. The steel plan does not give, within itself, any power to anyone to take any action other than through the normal procedures, so the Government has again urged the steel unions and management to work towards common objectives. I suggest that such gentle urgings are plainly not working. The shortsighted attitudes of the unions should not be allowed to torpedo any chance that Australia may have left to establish and maintain a permanently viable steel industry. After all, Broken Hill Proprietary Co. Ltd (BHP) has invested more than $1.2 billion in the steel plan and has put Australia in a position where our productivity could be such that we could have a very worthwhile steel industry. But, as I said, it is being torpedoed by the actions of the unions involved in this industry up until now. I might add that there is another problem. There is a bit of a power play going on between the local secretary of the Federated Ironworkers Association of Australia at Port Kembla and the federal secretary, also at Port Kembla. The local secretary is apparently endeavouring to prove that the federal secretary has no authority in Port Kembla. My criticism is of the Government's failure to take action in industrial relations generally. I point out that on 14 May this year, the Minister for Industrial Relations, Mr Willis, introduced the Industrial Relations Bill 1987. He said: An essential element of any industrial relations system . . . is that there should be effective means of ensuring adherence to the principles on which the system is founded and compliance with the decisions of its institutions. He added: The principal initiative is that the present bans clause provisions, which have long since fallen into disrepute and are now substantially moribund, will be replaced by a new direction and injunction process. In May of this year the Government Minister admitted that the present legislation was moribund and in disrepute. We were promised a new clause to deal with industrial relations disputation. That was on 14 May. Only 12 days later-on 26 May-Minister Willis announced that he would defer that proposal. It would not be debated; merely left to lie on the table. At that stage we wondered why he was saying that, but we found out the very next day because on 27 May the Prime Minister (Mr Hawke) announced an election for 11 July. On 29 June the Prime Minister, in an interview with the Melbourne Age, said to the public: I say unequivocally that we will be leaving the enforcement and sanction provisions as they are. That is our major criticism of the Government-that the Minister, Mr Willis, acknowledged that the sanction and enforcement provisions were moribund and should be replaced, yet when the Prime Minister decided to call an election all of those proceedings were put into the waste paper basket because the Government did not want to offend the trade union movement in any way. We are in a situation where this sort of disputation can go on, as it has at Port Kembla, without the benefit of any modern legislation to deal with it. That is the kernel of the resolution which I am asking the Senate to carry as a matter of urgency. As I mentioned before, BHP, by investing $1.2 billion in plant and equipment and by making no involuntary retrenchments, has fulfilled its part of the plan. But the unions are not carrying out their part of the plan. Unfortunately, there are no sanction provisions in the steel plan. When this steel plan commenced in 1984 these unions were quieter and there appeared to be a general spirit of co-operation. Productivity increased and there appeared to be a close working relationship developing between the union movement and the employers. But it then became clear that a number of union officials and members had no intention of mending their ways. The disastrous political strike over the New South Wales workers compensation issue became the final straw. In March 1987, two orders were issued by the Industrial Commission in New South Wales on two issues at Port Kembla. In both cases the local branch of the Federated Ironworkers Association of Australia chose to ignore the Commission's orders. One of these disputes resulted in the shut down for six days of BHP's most critical production unit-the hot strip mill-which almost resulted in a major stand-down in the automotive industry through feed shortages. Problems run deeper as unions appear to be prepared to condone the disregard of undertakings they have given to support productivity improvements which are not associated with capital expenditure-mostly in the form of work practice changes. In May 1987 Uncle Ben's of Australia, the largest user of food tin-plate, was forced to begin standing down its 500 workers at Wodonga because Port Kembla was unable to supply the tin-plate as a result of rolling strikes. These rolling strikes by the South Coast trade union movement, in attempting to force changes in the New South Wales State Government's workers compensation plan, cost BHP a very substantial sum-I believe it was in excess of $25m. I would like to quote what the President of the Industrial Commission of New South Wales, Mr Justice Fisher, told the South Coast unionists at a full bench hearing. He said: It seems you are standing fairly much alone. He went on to describe the behaviour of the Federated Ironworkers Association and the Amalgamated Metal Workers Union as `industrial anarchy'. He severely criticised them for using BHP as a battering ram to force the New South Wales Government to amend its workers compensation legislation. This campaign was quite contrary to the principles of the steel plan. In effect, the unionists at Port Kembla were endeavouring to force the New South Wales Government to change its workers compensation legislation by having a strike against BHP. That in no way was part of what was originally described in the steel plan as `the unions' commitments'. The Steel Industry Authority report says: The unions agreed that wage costs would be contained within prevailing community standards, consistent with the Prices and Incomes Accord; as an initial target, to re-establish a productivity level of 250 tonnes per employee per annum with future increases to be above the trend rate in national productivity; and to adhere strictly to established grievance settlement procedures. In what way was this dispute-a dispute between the trade union movement and the New South Wales Government-in any way complying with that undertaking? It was not until 22 September this year that the unions finally agreed to a solution. They agreed to distribute a leaflet to their members, including the redrafted policy on the dispute settlement procedure, four years after the plan had been agreed to. The Port Kembla steel unions, having done irreparable damage to the steel plan, are now to meet a Federal Labor Caucus committee in Canberra tomorrow to outline their case against the BHP Steel International decision to reduce its Port Kembla work force by attrition and voluntary retirement. That is what is to happen under the steel plan at present; the work force is to be substantially reduced by attrition and voluntary retirement. That is quite clearly still in accord with the steel plan. I do not think that the federal secretary of the Federated Ironworkers Association, Mr Harry Hurrell, has any real criticism of that. Mr Nando Lelli, the secretary of the Port Kembla branch of the Association, takes strong exception and he is bringing this matter before the Labor Party Caucus committee tomorrow. I ask that committee to look at what this union has done to Australia's steel industry when it considers this matter tomorrow. It is clear where the Government's plan has fallen down. The Government has attempted to organise a tripartite arrangement between the heads of the union movement, BHP and itself. But, as we have repeatedly pointed out to the Government, the union movement is unable to deliver at its head. The union movement can deliver only through the delegates on the shop floor. Unless in some way or other the Government is able to get the delegates on the shop floor to agree to this sort of plan, the plan is doomed to failure. Let me point out what is happening with respect to a dispute within the Government. The Treasurer, Mr Keating, speaking recently in Port Kembla, mentioned the proposal to cut the Port Kembla work force by 2,600 before December next year by way of natural attrition and voluntary retirement as part of the plan to get productivity up to 300 tonnes per person per annum by 1 January 1989. Mr Keating clearly approved of that, saying that a lift in productivity was needed to meet the competition BHP faced in the world market-place. Not only is a Labor Caucus committee considering this matter tomorrow, but also the Minister for Administrative Services, Mr West, has stuck his nose into the debate. He has called on the Federal Government to endeavour to persuade BHP to hold its Port Kembla work force to 12,250, not the 10,000 that is proposed. Senator Michael Baume —Totally irresponsible. Senator LEWIS —As my colleague Senator Michael Baume says, it was totally irresponsible action by Minister West. He is not satisfied with that. He is not satisfied with seeing BHP invest over $1.2 billion in an endeavour to get this industry back on its feet. He is asking BHP to invest another $165m for new production capacity in the face of its appalling industrial record on the south coast. Senator Puplick —What has he asked the unions to do to help? Senator LEWIS —Minister West has asked the unions to do nothing to help. Minister West should be looking to his colleague Minister Willis to introduce legislation which would enable companies such as BHP, when faced with this sort of confrontation and trade union destruction or industrial sabotage, to take some worthwhile action rather than something-and I go back to the words which Minister Willis used in May when describing the current industrial relations legislation-which is moribund and ineffective. Quite clearly, it is as a result of the annual report and the quarterly report of the Steel Industry Authority that the trade union movement, particularly on the south coast at Port Kembla, is sabotaging the steel industry plan. We are calling upon the Government to do more than simply slap the union over the hand and say, `You naughty boys, you really must co-operate better to achieve a better result'. That is not adequate. This Government clearly needs to take the stick to the union, or give someone the authority to take the stick to the union, when it behaves in this disgraceful manner. Senator COLLINS(Northern Territory)(4.30) —Mr Acting Deputy President, I am delighted that Senator Lewis has identified the Steel Industry Authority report of 1986-87 as the source of this motion. I hope that Senator Lewis will be happy to rely on the whole of the report, rather than selected parts of it, when this motion is voted on. He will have to eat his words. The report clearly demonstrates that this motion is a classic piece of union bashing, and very selective union bashing at that. Senator Lewis started his delivery by pointing out the problems at Port Kembla and claiming that it was the union which `torpedoed the Port Kembla steel works'. We will see what the Steel Industry Authority report has to say about that. I wish to refer to the point at issue which prompted this debate. Page 19 of the report contains statistics that Senator Lewis continually referred to in his speech. Those statistics run from June 1984 to June 1987 and apply to the three steel works at Port Kembla, Newcastle and Whyalla. The interesting thing about these statistics, which date from the time the steel plan became operative, is that they point out that Port Kembla is the sole problem. I went through a bit of past Press because I thought that obviously the Opposition, in moving this motion condemning the steel plan and the union movement, would have had a far better alternative. I found the official response, dated 11 August 1983, which was issued by the then shadow Minister for Industry and Commerce, Senator Peter Rae. The opening paragraphs of this four-page response states: The Labor Government's steel industry package will be a disappointment to those involved and also a disappointment to Australia. It then goes on for two pages attacking the steel industry plan, saying that it fails to do this, fails to do that and fails to do something else. I got to the third page wondering where the alternative was. I found it in the last sentence of the final page. After three pages of attack, the alternative Opposition policy was set out in the following sentence: An effective policy will provide either temporary protection during a crisis or a policy enabling full restructuring of the industry. Wonderful! Brilliant stuff! The reality is that if it had not been for the Labor Government and for John Button's steel plan, which has been dramatically successful by any standard, the steel industry under those opposite would now be as dead as a maggot. That is a fact. The steel industry plan provides for bounties to be applied up to a ceiling of $72m a year, although payments up to that ceiling have not had to be made. The Government has obliged itself to pay $72m if necessary. With the policy we keep getting rammed down our necks from opposite that governments continually have to curtail their expenditure, the steel industry would have got none of that money and would now be dead and buried. That is the alternative policy of the Opposition. When one looks at the report, it stands out like a shag on a rock that Port Kembla is the problem-a unique problem during one particular period. Common sense would dictate that, instead of leaping into the Senate with a bit of union bashing, honourable senators opposite should read the rest of the report to find out why. Page 2 of the report states: In the three months ending June 1987 alone- it then cites the number of man hours lost- . . . over 90 per cent of which were at the BHP Port Kembla steelworks. Why? The third paragraph on page 16 of the report states: Increased industrial disputes combined with difficult operational and commissioning problems at Port Kembla and Newcastle in the six months to June 1987 resulted in a productivity performance similar to that achieved prior to the plan's inception. I point out to honourable senators that, despite the problems canvassed in this report, the figures went down only to those applying before the plan's inception. Page 17 of the report states: While the setback in productivity gains witnessed over the last 12 months reflects, in part, technical difficulties associated with the commissioning of new plant, the Authority . . . is concerned that the opportunity to improve management and work practices in the industry is not being grasped. It lays the blame fairly and squarely on both management and unions in respect of that criticism. Page 10 of the report states: The identified decline in production levels corresponds to the period in which BHP experienced considerable difficulties commissioning new plant under its capital investment program. These difficulties were exacerbated by . . . industrial disputes. They were not caused by them. On page 11, the following comment is made about Port Kembla, which is the problem: Commissioning problems were experienced in many areas of the works affected by the major developments, including the slab casters, hot strip mill, plate mill and mechanised systems. Of major significance was the difficulty in getting hot slab feed into the slabyard as originally planned. The problem should be solved following implementation of systems currently being commissioned. Honourable senators should listen to this: Such problems saw the monthly output of the Port Kembla works fall to 202,000 tonnes in April 1987, compared to an average monthly output in the 1986 calendar year of 286,000 tonnes. This report correctly lays the major blame for the fall in production right at the feet of the company for failing-- Senator Michael Baume —Rubbish! Senator COLLINS —Has Senator Baume read it? Senator Michael Baume —My word I have read it. Senator COLLINS —Let us turn to page 22, if Senator Baume wants some more. Senator Michael Baume —I will fill the quote out for you. Senator COLLINS —Senator Baume will have his turn next. I quote again from the report at page 22: As previously mentioned, BHP encountered considerable production difficulties during the year, particularly at its Port Kembla plant. As a result, there was a marked deterioration in BHP's delivery performance during the latter part of the year, causing disruption to the operations of many downstream users of steel product. It is expected, however, that this trend will be reversed as the problems currently facing BHP in commissioning new plant under its investment program are overcome. Despite the fact that the report keeps reiterating that point, members of the Opposition fail to mention that entirely. They say it was all the fault of the unions torpedoing production. The report shows that that is absolute and crass nonsense. As I have said, it is a classic piece of union bashing. However, I was then interested to find out, if there was such a huge blip in the graph because of Port Kembla, what was the industrial problem. What was it that caused the problem as well as the commissioning problems? I found out about that, too, and I will tell honourable senators what it was. The problem was in objection to the removal of common law rights in respect of workers compensation and the payments made to disabled workers in an extremely dangerous industry. Senator Michael Baume —By a Labor government of New South Wales. Senator COLLINS —So what? I am talking about it from the workers' perspective. Opposition senators are the ones blaming the unions. I am telling the story from their side of the argument. It is quite irrelevant who brings these changes in. Senator Michael Baume —You are blaming the industry. Senator COLLINS —If Senator Baume wants to stand up in the House and say that common law rights should not be removed, let him do so. But, as all honourable senators know, that is not a problem confined to the steel industry. The removal of common law rights for the victims of motor vehicle accidents and all the rest of it is causing problems all around this country. Why is that? It is because those rights have been entrenched in common law for hundreds of years, so naturally people get upset when they are removed. I quote from the Australian Financial Review of Wednesday, 1 July 1987. An article by Christopher Page on this very matter which caused this dispute at Port Kembla states: From July 1, the claims of totally incapacitated workers will be limited to the award rate up to a maximum of $500 a week for the first 26 weeks . . . It goes on to say: The new system will prevent an employee injured at work from taking common law action outside the provisions of the legislation. A further article from the same newspaper-I do not have time to quote from all of them; I have about 15 here-states: Changes to workers' compensation legislation were passed in the NSW Parliament yesterday despite a protest strike by 18,000 workers which has stopped production at BHP's steel plants at Port Kembla . . . It continues: Union representatives claim the recent increase in industrial disputes arose because BHP refused to participate in tri-partite talks over the compensation issue as it has done over other issues such as the introduction of new technology. The point has obviously been completely lost on honourable senators opposite. I refer them to the motion on which we will vote. The motion says that the unions took this action in an attempt to torpedo the steel industry. The motion states: The need for the Government to bring to an end union sabotage of the steel industry plan. Of course, the fact is that the unions took that action, rightly or wrongly, because they were protesting at the total removal, by legislation passed, of common law rights for compensation for injured workers-rights that had existed for hundreds of years. That is why they took the action-not to sabotage anything. It is fascinating to note that members of the Opposition are quite happy to scream their heads off about workers protesting against the removal of common law rights but are also quite happy to scream their heads off about the retention of common law rights allowing employers to take trade unions to court. They want that retained. But they want to remove common law rights for injury in a dangerous industry, as the steel industry is, and expect the workers simply to roll over, die and cop it. Otherwise, they say that workers are sabotaging the industry. That is the point at issue. I am not surprised that industrial action was taken. It is also very interesting to see what is being done about it. I turn to page 4 of the report. I wish people would read all of it, instead of just the table on page 19. The report, scanty though it is, gives the reason for the dispute, if those opposite would only look for it. It states: The deterioration in the management-union relationship over recent months, particularly at Port Kembla, is extremely disappointing. The fact that the level of disputation can largely be attributed to issues outside the direct control of the steel industry, namely changes to the NSW workers' compensation legislation, does not reduce the seriousness of recent events. Senator Michael Baume —So it is not the employers' fault. Senator Tate —You will get your go. Senator COLLINS —In fact I think he is next on the speakers list, so he should just hold still. The fact is that the annual report which Senator Lewis has identified as being the source of this debate condemns him out of his own mouth. The fact is that the report itself ascribes the majority of the production decreases at Port Kembla to the failure in commissioning new plant, not to the industrial disputation which, the report says quite succinctly, `exacerbated' the problem, not caused it. Conveniently, that was totally ignored by the Opposition. What is happening in respect of the problems which are all acknowledged as serious? I can tell honourable senators what is happening. BHP and the steel unions have reached agreement on written dispute settlement procedures, which in part caused the problems that occurred earlier this year. The unions and BHP have met with the Steel Industry Authority in recent weeks and are pursuing a range of issues in a co-operative manner-that is what we are into on this side of the House-and it has produced the results that we are looking for in the steel industry, including further improvements in work practices, security of employment and improved consultative arrangements. The fact is-this is a fact; Senator Lewis has also ignored it-that Broken Hill Proprietary Co. Ltd's productivity is currently approaching the record levels achieved late last year and further improvements are expected as the full benefits of the $1.2 billion investment program begin to be felt. Broken Hill Proprietary Co. Ltd's raw steel production levels, adversely affected by the hiccup earlier this year, are back to normal levels. I would like to refer to that hiccup. I turn again to the table on page 19, which caused this knee-jerk, shoot-from-the-lip reaction, to look at what sort of hiccup we are talking about, and the great difficulties caused when percentage increases on a low statistical base are used as the focus for an argument. Interestingly enough, this report has used a completely different methodology from that used by the Australian Bureau of Statistics (ABS). The Australian Bureau of Statistics figures are compiled on the basis of days lost in the industry. For some reason, this report has chosen to use the basis of hours lost in the industry, which, of course, provides a much more dramatic figure than the comparative Australian Bureau of Statistics one. I do not have time to cite the figures but I have looked them up and these figures are far more dramatic. The result is the same but the numbers are bigger. What is the problem in using percentage increases? I will tell honourable senators what the problem is. In the case of Port Kembla, the decrease in hours lost between June 1986 and December 1986 went from 124,774 to 36,532, a decrease of 70 per cent. That represents 90,000 hours. We can apply that same figure of 90,000 hours to the next quarter, to June 1987. The decrease between June 1986 and December 1986 was 70 per cent. But if we increase by the same 90,000 on that same basis from December 1986 to June 1987, we then get a statistical increase of 240 per cent on the same number of hours. That is always the great danger of using percentage increases on a low base. I will give a classic example of something that occurred once to me. I was sitting in an aircraft on a flight to somewhere. I picked up an in-flight magazine, which contained an article on the Northern Territory's horticultural enterprise. Referring to a particular crop-I think, from memory, that it was maize-it extolled the virtues of the Northern Territory with the heading, `Northern Territory maize production has doubled in this calendar year'. Being an ex-horticulturist, I though, `My goodness'; I did not even know that we grew the stuff. When I got back to Darwin I found out that the figure was in fact correct. In the year before there had been 100 acres in production and in this particular year there was 200 acres. We had doubled our production. I say to Senator Lewis that that shows the problem of using percentage increases on a low statistical base. That is probably why the ABS does not use that methodology-thank goodness. So far as the alleged failure of the steel plan is concerned, I have been referring fairly consistently, I think, throughout this debate to the very thing that Senator Lewis tells us was responsible for this motion, the Steel Industry Authority report. Page 11 of that report states in part: Since the inception of the Steel Industry Plan, and despite continued adverse conditions in the international market, the Australian steel industry has made considerable progress towards the attainment of the Plan's objectives. So much for this motion. It is in fact a piece of mindless union bashing. I use the term `union bashing' advisedly, because Senator Lewis's appeal to the Senate to support the motion completely failed to mention the fact that this very report pointed out that the industrial action, regrettable though it was, simply exacerbated the major cause of the decrease in production of steel, which was the problems of the company in commissioning new plant. I think Senator Lewis has demonstrated very clearly that this motion is nothing more than union bashing, and it deserves no support whatsoever. Senator McLEAN(New South Wales)(4.46) —The Australian Democrats cannot support this urgency motion. It does not treat the facts fairly, it is a union bashing motion, it is excessively alarmist and it denigrates the considerable success flowing from the implementation of the steel industry plan, which began in January 1984. I apologise to the Senate in that I am just about to repeat much of what Senator Collins has said, because even though we have been working in different rooms for the last six hours, reading the same documents, we have arrived at precisely the same conclusions, and quite independently. One of the gross inadequacies of this motion is that it blatantly ignores the tripartite nature of industrial relations in any nation, that is, a relationship between government, unions and management. Again we find our role in this debate is to ensure realism and fairness. We are happy with this role, particularly in this urgency debate and in any debate. It seems that it is likely to be a role that the Australian Democrats will especially be called upon to play in debates in relation to industrial relations. It appears that the trigger for this debate is observations made in the annual report of the Steel Industry Authority for 1986-87. They were restated rather starkly by Mark Davis, reporting in this morning's edition of the Australian Financial Review. The Australian Democrats feel that the Davis article and this motion give excessive emphasis to recent problems at Port Kembla, and that the industry's real successes have largely been understated, or completely disregarded, by the supporters of the motion. If we are to be fair in this debate it is important that we acknowledge that bad management practice is as common and as guilty as bad work practice. Likewise, we should acknowledge that the Metal Trades Industry Association has, by and large, established good working relations with metal industry unions; we should acknowledge that the steel industry plan has been more than modestly successful; and we should acknowledge the facts. Unless we are prepared to acknowledge the facts, we will not be doing justice to Australian management, unions or State governments. Let us look very briefly at the history of the steel industry plan. It was launched in January 1984 for a period of four years and therefore it will be evaluated in December 1988. In essence, it has been working well, considering that it has been working within a fairly difficult economic climate, a climate of shrinking world demand for its product. It has been working in a climate where there has been considerable demand for protectionism, ironically, once again, from the United States of America. It has been working in an economic climate of falling employment in the industry. In fact, within Organisation for Economic Co-operation and Development countries the fall of employment within the industry has been in the order of 43 per cent since 1974, and in the United States it has been in the order of 55 per cent since 1982. I am quoting all of those figures from the controversial report which the Opposition has selectively quoted from as the basis for this motion. The plan has been working in an economic climate where there has generally been excess capacity within the industry, an excess capacity of 100 million tonnes to 120 million tonnes annually. So we believe that the Australian steel industry has performed remarkably well under very difficult circumstances. It is true, as Senator Collins has said, that the Broken Hill Proprietary Co. Ltd (BHP) has been experiencing considerable difficulties in commissioning new plant. But we do not believe that it is fair to sheet those difficulties home to unions. In fact, it is the nature of the advancing technology within this extraordinarily capital intensive industry. The indications are that there is a great deal of potential for the Australian steel industry, and this is acknowledged on page 3 of the report. It is due in part to increased competitiveness flowing from the devaluation of the Australian dollar, but only in part. The industry per se has performed admirably during the three years that have already passed of its four-year pre-evaluation life, and I can cite those achievements. There has been a substantial increase in investment by BHP, in fact an increase in investment of $1.2 billion, which is 50 per cent more than was anticipated. Once again I am referring to page 15 of the report. The reduction in the work force reflects the extraordinarily high level of technological innovation and adaptation which has been undertaken by BHP. This has been reflected in its relatively high profitability during the period. So by any criterion the industry has not performed badly; in fact, it has performed well. The problem that has been mentioned at Port Kembla is indeed an aberration, partially of the Port Kembla plant, and it reflects the decision by the relevant unions to fight a workers compensation battle with the New South Wales Government concerning its WorkCare program at the Port Kembla plant. So it is an aberration which is specific to a given situation and a given piece of State legislation, in a given location and at a given time. It must be remembered that accident-related legislation is very close to the hearts of those who work in industries such as the steel industry, the mining industry and the building industry. They tend to give it their very close attention. They respond very vigorously and they use their strongest industrial weapons in pursuing their intent. Government's legislative performance in relation to industrial safety and industrial health-I am talking not only about the Federal government but also about State governments-historically has not been good, and that has been true of governments on both sides of politics. The differences in productivity which are mentioned on pages 16 and 17 of the report do not clearly distinguish between causes, that is, between differences resulting from industrial disputes and differences in productivity resulting from the installation and commissioning of new plants. In that respect, we believe that the figures which were quoted distort the realities. Reductions in productivity reflect not only union problems; management must accept its share of the blame as well. We believe that is one of the gross inadequacies and unfair facets of this motion-it does not accept the fact that management is a partner in this tripartite relationship. If we are to get to the nub of the question, which really is the level of industrial disputation, we must be very careful with the statistics which we quote. In the May-June period of this year there was this aberration at Port Kembla which, as I said, reflected one particular dispute. I am also teased by the fact that the State Liberal Opposition in New South Wales, and in fact the Chamber of Manufactures of New South Wales, supported the New South Wales Labor Government in its WorkCare legislation. In doing so they actually precipitated what is the focal dispute at the Port Kembla plant. It is interesting also to note that there is a contradiction between the attitude being displayed here this afternoon by the Opposition in this chamber and that which it displayed in its discussions of the now defunct Industrial Relations Bill when it objected so strongly about access to common law, which is precisely the same right, as Senator Collins has already cited, which was being pursued by the workers at Port Kembla early in the same year. The Opposition argues frequently that the fall in industrial disputation is a world-wide phenomeno and that the present Federal Labor Government cannot claim any credit for what we consider to be a very creditable record of the last four years. We do not accept the Opposition's claim. We believe that, on a fair examination of the statistics, the Australian level of industrial disputation of the last few years has been very creditable. We would cite the extensive work done by Messrs Begg and Chapman published by the Centre for Economic Policy Research at the Australian National University which appears in the recent edition of the Journal of Industrial Relations. In that work we are warned quite seriously about the way in which we interpret and handle figures concerning industrial disputation. The real need is to be cautious with motions of this type. I suggest to the chamber that the urgency motions from the Opposition in the last two or three days are superficial. We urge them to practise caution in the use of this medium within this chamber. We suggest that this motion damages, unfairly and unnecessarily, our reputation as a reliable supplier of steel and fails to acknowledge the creditable performance of the Australian steel industry. We urge the Opposition to be more positive, and to acknowledge that co-operation is the vital ingredient in industrial relations. We must all recognise the constitutional and other limits on any government's power to act. We must avoid the Canute syndrome: believing that legislation is the essence of good industrial relations. Of course, that is false. The essence of good industrial relations is co-operation and acknowledgment of achievement. Both State and Federal industrial relations scenes are littered with ineffective legislation which has resulted in failed attempts to provide for industrial peace by fiat. In conclusion, given the nature of the steel industry and the Government's failure to enact long promised legislation on occupational health and safety, and given the extraordinarily high level of industrial accidents which cost the community $5 billion per year, it is high time that governments, unions and the community at large recognised that the responsibilities for industrial safety in essence lie largely in the hands of governments and management. There is no escaping the fact that the unions, management and governments share responsibilities for our industrial relations. This motion denies that shared responsibility. It misrepresents the facts. It does not assist in building confidence in an Australian industry that has essentially performed well in recent years, despite adverse world markets. For these reasons the Australian Democrats oppose the motion. Senator MICHAEL BAUME(New South Wales)(4.59) —I have heard some rubbish from both the Australian Labor Party and the Australian Democrats in the past, but today's level of hypocrisy probably reaches an apex. It is extraordinary-unbelievable-that we have heard from both the Labor Party and the Democrats attacks on the management of the Broken Hill Proprietary Co. Ltd. Senator McLean —They were not attacks; they were observations. Senator MICHAEL BAUME —Senator McLean says that an observation is not an attack. We hear this asinine remark from Senator McLean suggesting that management is equally at fault in this matter. I asked him to provide any evidence. He had none to offer-because there is none. Senator Collins —Read the report. Senator MICHAEL BAUME —Senator Collins inanely interjects, `Read the report'. That report does not in any instance detail any single example of management error in this area, whereas it illuminates the fact that in specific areas, where the worst industrial unrest took place, the management had no role whatsoever. Senator Collins sought to mislead this place-until I interjected to correct him-that this was a matter on which the unions were being savagely treated. By implication he was saying `savagely treated by the management', because he did not say at that stage that it was the New South Wales Labor Government. He was not honest enough to come forward in this place and say that it was the New South Wales Labor Government that was having the dispute with the unions. The fact is that the management had no role whatsoever in the major dispute which has sabotaged this plan. But we heard the Democrats and members of the Labor Party falsely stating that the management is equally at fault. What hypocrisy. What absolute nonsense. We have dealt with Senator McLean's nonsense. Now let us deal with what we heard from the great lawyer, Senator Collins, and his eloquent defence of the common law. I wonder how he went in the Caucus room when his own Government put up the proposal which is mentioned on page 1 of the Canberra Times on 2 November in the following terms: The Government's move to abolish common-law actions for public-service workers under a new compensation scheme . . . I wonder what Senator Collins had to say about his own Government's view that that should happen. Senator Collins —I think it is correct. Senator MICHAEL BAUME —I look forward to Senator Collins voting against that measure when it comes into this chamber, to see whether in fact he has the character to stand up for what he believes in. Senator Tate —He said he thought the Government was correct; he agrees with it. Senator MICHAEL BAUME —If he agrees with getting rid of the common law arrangements for the Feds, why is he pretending that he opposes getting rid of the common law arrangement for the steel industry? He was saying how appalling and disgraceful it is. Let us face the reality that Senator Collins is trying to have two bob each way. His attempt to paint the employers somehow as villains in this industrial dispute and the unions as innocent because all they were doing in this dispute was seeking to retain their common law rights-which is what he was saying-shows his hypocrisy. It shows how nonsensical the argument he was endeavouring to put out was. I must say that this combination of a lack of evidence from Senator McLean and absolute hypocrisy from Senator Collins is self-evident. What, in fact, does the report reveal on these matters? I believe it is vital to examine in some detail what the report actually says in relation to these matters. In particular, I think we should deal with the fact that there has been effective industrial sabotage of the steel industry plan by the unions. Let us look at pages 4 and 5 of this report. It says: The present level of industrial disputation within the steel industry- and that really means Port Kembla, as we have all established- is a clear indication that some of the parties at least have lost sight of their common goals. I stress the word `some' because clearly that wording is a polite way of excusing the management. The plan is tripartite. The word `all' was not used. If it were not a tripartite plan it would be straightforward, but it says `some' have lost their goals. It goes on: Moreover, it perhaps exposes a fundamental flaw in the lines of communication between management and unions, and within unions. I stress those words `and within unions'. It goes on: The fact that the level of disputation can largely be attributed to issues outside the direct control of the steel industry . . . That means management. As the report says, the level of disputation can largely be attributed to these things. We have had some management bashing from the Labor Party and the Democrats. They have deliberately excluded the clear implications of this comment in the report: . . . the level of disputation can largely be attributed to issues outside the direct control of the steel industry, namely changes to the New South Wales workers' compensation legislation . . . That is why Senator Collins was not prepared to concede the subject of the matter of urgency. He tried to imply that the management was at fault. The report continues: does not reduce the seriousness of recent events. In fact, it raises grave doubts as to the commitment by some of the parties to the security and development of the steel industry in general. Let me get to the clear implications of that. We have said that it was out of the direct control of the management. So, clearly, the management was not involved. The report said that this issue, in which the management was not involved, `raises grave doubts as to the commitment by some of the parties to the security . . . '. Who are the parties involved? The management was not party to it. It has already been said that management was not party to it, but questions are raised as to `the commitment by some of the parties'. Senator Collins —It said `some of the parties'. Senator MICHAEL BAUME —Yes, exactly; `some of the parties'. I have already explained to the poor, incompetent Senator Collins, who cannot understand the English language, that the report also says that management was not party to it. Senator Collins —Read it again; you're wrong. Senator MICHAEL BAUME —It was not party to this particular dispute. I have read it out three times. If the honourable senator cannot understand it after three times, he should go away and try the ABC. On pages 24 and 25 there is clear evidence that the number of disputes is increasing and that dispute settling procedures are not being adhered to. I ask: By whom? The report tells us: This was particularly so in the dispute in New South Wales following the introduction by the State Government of new workers' compensation legislation. The Authority believes that the dispute has severely damaged the goodwill and trust which had developed between management and unions since the inception of the Plan in 1984. Moreover the dispute caused hardship and financial losses to BHP, to employees and to the steel producing regions at large. That issue had nothing to do with management. I remind the Labor Party that that key distinction has been not only glossed over but totally ignored. Yet the words in the report clearly indicate that that is where the crisis has developed. It is a crisis that developed in exclusion, if you like, of the management. It was a dispute basically between the New South Wales Government and the unions. Yet its consequences have been disastrous. It has sabotaged the results of the steel industry plan. Can we look to the evidence of sabotage? Of course we can. We have seen evidence of orders cancelled and widespread problems in this industry. The problems have been so widespread that the Labor Party has avoided making another quotation; that is, that part of the report which says that the future of the industry could be at risk. Page 3 of the report states: . . . the Australian steel industry has the potential to become the world's lowest cost steel producer and potentially a competitive exporter . . . A failure in the performance of either capital or labour would not only represent a lost opportunity for the Australian steel industry but, given the extremely competitive world steel environment, could jeopardise its existence. In other words, continual industrial unrest and a failure of capital-I stress `failure of capital'-could jeopardise the existence of the steel industry. Warning was given last year in the annual report of the Steel Industry Authority about the future of the industry as a result of industrial unrest last year. I suppose the Labor Party would say that that was just a one-off, for some special reason. Again, the Labor Party offers another set of excuses. As Senator Collins said, there were problems of capital investment. There is no doubt that there were some warm-up problems. The industry says, quite clearly, that the decline in production or the failure to meet targets this year, was 50 per cent due to delays and difficulties in introducing new capital plant-they were unavoidable-and 50 per cent due to ratbaggery by the union movement, which has unnecessarily undermined and sabotaged the achievement of this plan. That is the point. One cannot possibly find someone to blame if there are technical problems when such an enormous amount of money has been spent. BHP has spent $700m on this. Inevitably there will be some start-up problems. The reality is that they were unavoidable. The important issue, which Senator Collins is too thick to understand, is that it is not only totally unnecessary but also totally damaging and disastrous that there should be this massive level of industrial unrest as the labour movement in Wollongong has failed to meet its obligations under this tripartite arrangement. That is the issue. We are not saying that there are no other reasons for a reduction; we are not saying that there are no other reasons for the failure to meet the targets. We are saying that there were start-up problems and that accounted for about 50 per cent of the decline. We are saying that there is a massively unnecessary level of industrial unrest and that that has jeopardised the future of this industry. Let us not pretend that this does not exist the way we have heard today. Senator Button has complained about this unnecessary industrial unrest. He does not pretend that it does not exist, the way Senator Collins does, or the way Senator McLean tries to excuse it. Mr West, who is off with the gorillas on his own, swinging through the trees in Wollongong, does not believe that the reduction in employment which is required and which fits into the steel industry plan, as Senator Button said in the Senate Estimates, should take place. Senator Button has criticised the unions. Mr Keating has agreed that there should be a continued reduction in the number of jobs. Also Senator Walsh said today: . . . it is deplorable that, after the company has met its obligations in terms of investment-indeed, in terms of quantity it has more than met its obligations under the plan-and the Government has met the obligations it accepted in 1983, the work force is letting the agreement down. Senator Walsh has said that. Yet there has been no acknowledgment of that. According to the Labor Party, it was all because of dreadful management. The Australian Democrats says that it was equally to blame. The reality is that the case put by the Government and the Democrats is arrant nonsense. There has been a sabotage not simply of the steel industry plan but of $200m of extra investment that the company had planned to spend in Wollongong. That has now been cancelled. That project was for the rebuilding, not just the relining, of No. 4 blast-furnace. It would have meant continued investment in the region, which is now to be brought to a shuddering halt. It is being brought to a shuddering halt not simply because of problems in commissioning new plant but, as was evidenced before the Australian Conciliation and Arbitration Commission in New South Wales, because of the level of industrial unrest. That evidence was given before the Commission in May this year. At that stage the figure was $165m; it is now about $200m, with ancillary works. The warning that the rebuilding program at Port Kembla steel works could be abandoned because of union activity was given in June and it was ignored. The ACTING DEPUTY PRESIDENT(Senator Powell) —Order! The honourable senator's time has expired. Senator CHILDS(New South Wales)(5.14) —The Opposition's urgency motion states: The need for the Government to bring to an end union sabotage of the steel industry plan. Nothing could more adequately show the difference between this Government and the Opposition than this urgency motion. The Government has introduced one plan after another into Australian industry-plans that stand as monuments to the regrowth and revitalisation of Australian manufacturing industry. The plans, which are well known, concern the heavy engineering, textile, clothing and footwear, and shipbuilding industries. The list goes on. The plans represent, if you like, the mutual tackling of problems by the partners in industry, assisted by the Government, based on co-operation, on changing our industries and on creating a stable climate. Senator McLean, in speaking for the Australian Democrats, acknowledged that his party favours the same approach. It is a common-sense approach. The tackling of management and work practices, investment, infrastructure and regional planning and development are just some of the areas that are looked at in these plans. Let me now refer to the steel plan. It is true that the Steel Industry Authority has been critical, but I think Senator Collins has dealt adequately with that criticism in a balanced way. The 1986-87 annual report of the Authority analyses and reviews the period ending June of this year. However, we find that since June of this year there has been a significant improvement in the industrial relations situation in the industry. It can be said that the hard won gains of the first three years of the steel plan have been substantially restored. Broken Hill Proprietary Co. Ltd (BHP) and the steel unions have reached agreement on written dispute settlement procedures which were a major problem earlier in the year. The unions and BHP have met with steel industry authorities in recent weeks and are pursuing a range of issues in a co-operative manner, including further improvements in work practices, security of employment and improved consultative arrangements. BHP's productivity is currently approaching the record levels achieved late last year and further improvements are expected as the full benefit of the $1.2 billion investment program begins to be felt. Senator Button has succeeded with his plan, contrary to what Senator Lewis suggested. BHP's raw steel production levels, which were adversely affected earlier this year, are back to normal levels now and that is the important thing. In fact, the September output exceeded the figures for the corresponding month last year. Let us get the matter in balance and away from the hysteria that Senator Lewis and Senator Michael Baume have generated. This is hardly a picture of an industry that has been sabotaged by unions which, I remind the Senate, comprise workers whose future employment opportunities are dependent on the continued viability of the Australian steel industry-an industry that is poised for strong development. The end of the year should reflect the successful achievement of the steel plan's major objectives. That is the background to this matter. The creation of an internationally competitive steel industry is well in place and the advantages to Australia of a powerful steel industry do not need to be emphasised. Senator McLean said that he did not know whether the trigger for this matter of urgency was an article by Mr Davis in the Australian Financial Review. There is another possibility-BHP Director Elliott, who last Friday became the President of the Liberal Party of Australia. Perhaps this is the reason members of the Opposition rushed into the chamber and moved an urgency motion. Senator Lewis, who is the Deputy Leader of the Opposition in this place and the Opposition spokesman on industry, has displayed today the Liberal Party's typically one-sided industrial relations policy and industry policy. He is preoccupied with enforcement and sanctions; that is all the Liberal Party understands. The Liberal Party does not seek co-operation with industry but tries to put the boot in. His one-sided and confrontationist style is a classic, but it is even more serious than that. Everybody should be very offended-two million trade unionists in this country will be offended-by the one-sided language of this urgency motion which refers to union sabotage. I remind honourable senators that the dictionary defines the word `sabotage' as `malicious or wanton destruction'. Senator Michael Baume —Hear, hear! Senator CHILDS —Senator Baume says, `Hear, hear!'. `Sabotage' is also defined as the doing of damage to equipment et cetera by dissatisfied workmen or hostile agents. The Liberals agree with that. The violent and emotive language used by members of the Liberal Party cannot be an accident because Senator Lewis, as a barrister, would not use language loosely. So this urgency motion is a conscious effort at provocation by the Liberal Opposition no doubt to appease its new President who is waiting in the wings to see how it performs. Faced with this blackguarding of the unions by the Opposition, I have sought some information to find out what the union side is. As a former union official, I realise that in any industrial dispute there are always two sides; it is never a simple position. As the Opposition has spent so much time attacking and it cannot take it--(Quorum formed) Before the quorum was called, I was referring to the fact that there has been distortion by the Opposition in the debate. I want to refer briefly to what the unions say is the problem. Under the steel plan, the unions are committed to achieving initially 250,000 tonnes output per person and then to increasing productivity by more than the national average. The record shows that productivity per worker has generally improved greatly. More recently, however, productivity figures have dropped and we have acknowledged this fact. But the reasons for this drop in productivity are much more complex than the Opposition's simple union bashing exercise would have us believe. Poor production planning and unrealistic completion dates for commissioning new plant have not only caused disputes but also have led to substantial loses in production. In fact, two-thirds of production loss was due to mismanagement of plant or what the company has termed `operational problems'. This is the view of the trade unions involved. Total costs of these so-called `operational problems' were $56m in Port Kembla alone. This is the evidence that Senator Baume challenged Government senators and Senator McLean to produce. Belatedly in his speech, Senator Baume acknowledged this fact when he said that there was a 50 per cent warm-up problem. It is a damned big warm-up problem for a management that he says does no wrong when $56m was involved in Port Kembla alone. That is not a surprising figure because the Australian Bureau of Statistics figures show that 40 per cent of industrial disputes in the metal industry are caused by management policies. The Opposition is congenitally incapable of acknowledging management error in this area. The very point of the industry plan is to try to overcome those problems. Many disputes arise simply because BHP's industrial bureaucracy is slow to respond to these problems. I know that that is likely to be true because when I was a union official BHP traditionally was a company that had a bad industrial relations record. Although I acknowledge that BHP's record has improved in recent times, it has a great deal of ground to make up. Unfortunately, with the advent of Mr Elliott, I am not sure that it will be helped in that process. Disputes of this nature made up the $45m lost at Port Kembla. While the workers compensation dispute was regrettable-and I do not think that anybody would say other than that-the real reason for the lost production lies squarely with BHP's refusal to change its nineteenth century industrial relations practices. An example is its scare tactic of announcing, during the sensitive second tier wage negotiations, the loss of 4,000 jobs. It is a typical BHP ploy, but something that stirs all the people in such a situation. That is a problem because the many people who have been upset are more likely to be excited and become involved in an industrial dispute. The bottom line is that BHP still lost more money-the $56m that I have spoken about-through poor management than through all the disputes, amounting to a loss of $48m, at Port Kembla. That is the union's attitude. It is the sort of evidence that Senator Michael Baume challenged us to produce. I will go further with Senator Baume. I will give him a few more things to check up on about BHP management. Unions allege that, at a casual glance, BHP stock levels indicate that large quantities-up to $88m-worth of production-are being stockpiled haphazardly around the Port Kembla plant, because the new technology is not running efficiently enough to finish the work. That is something for Senator Baume to look at because that suggests that management is not being efficient. Senator Michael Baume —Is it management's fault that you have had these industrial relations problems? The answer is no. Senator CHILDS —We have had problems. Senator Baume bubbles away like a can of Fosters. But the reality is that he cannot ignore the fact that many of the problems are management based. I want to go a bit further because the unions have raised one other matter that I think is worth while putting into the equation of this debate. The unions have drawn my attention to the fact that one might speculate on what Mr Elliott is up to. The Australian Financial Review of 2 November states that Mr Elliott said that if BHP shares fell much further, BHP would become a takeover proposition. The question we have to ask-and I hope that everybody will ask it-is: Is Mr Elliott trying to depress the price of BHP shares even further so that he, Holmes a Court, or one of the other people can gobble up the lot?. That is something we have to consider, something that is not in the biased matter of urgency introduced by the Opposition, but it might well be the reason why the Opposition has got so excited today. When its new President told it to jump it jumped. Senator PARER(Queensland)(5.29) —I support the urgency motion moved by my colleague Senator Lewis: The need for the Government to bring to an end union sabotage of the steel industry plan. I would like to point out that every time blame is sheeted home to irresponsible and militant unions for quite irresponsible actions, those opposite-not all and I exclude people like Senator Button and Senator Walsh when I say this-jump around and shout `union bashing'. The union is the sacred cow that is above the law that applies to everyone else. It is worth recounting a little history because in the last two decades we have seen a major restructuring of the steel industry throughout the world. Traditional steel makers and shipbuilders in Britain, the United States and Europe saw the loss of their traditional heavy industries, initially to Japan and then eventually to Taiwan and Korea. A major reason for that was that following the Second World War, Asian countries, particularly Japan, were able to start from scratch and install modern steel mills in locations strategic for the importation of raw materials and the export of finished products. They had the will to do that because they were on a recovery pattern-particularly in Japan. Nothing exercises the mind more than starting from nowhere and trying to build up. Australia was in a similar position to the traditional areas but did not suffer from the disability of having its mills located in the wrong places. However, it suffered from featherbedding, overmanning, lack of adequate profits and, hence, precluded new capital investment in equipment. Europe-notably France, Italy and Holland-modernised. The recovery of British steel was nothing short of miraculous. It should be pointed out, however, that it was a matter of recover or die. That situation confronted Australia. A concerted effort to modernise the Australian steel industry was undertaken in 1984 with the introduction of Senator Button's industry plan-which was a good plan; there was nothing wrong with it. The purpose of the plan was to give local industry a chance to recover, create a leaner and more profitably operation and, more importantly, survive. A decision had to be made: do we or do we not want a steel industry? Most developed countries would take the view that they need a steel industry, but only if it is viable in the long run. The plan hinged around three commitments: firstly, the Government bounty; secondly, an investment of $800m by the Broken Hill Proprietary Co. Ltd-I believe that $1.2 billion was spent on re-equipment; and, thirdly, union co-operation in productivity. While the Government certainly has done its bit and BHP has attempted to make the plan work with its $1.2 billion investment in plant and equipment, it is quite apparent that the steel industry unions have not. Senator Collins, in his speech, tended to discount the table on page 19 of the Steel Industry Authority annual report. He said that other factors were involved. Certainly there are other factors, but they are minor. What we must not forget-and we can never forget-is that we had to make a decision: do we want a steel industry or not? Those sorts of decisions were also made in England by companies such as the British Steel Corporation. It was not done, I might say, without some pain. Honourable senators opposite may well think about the example put to us by steel workers from Llanwern in Wales, who would not accept, until orders ran out, that their industry was finished and was going to be shut down. The orders had to run out before something was done. It was like turning on the light switch but the light not coming on. The unfortunate thing is that in an industry matters often have to get to that stage before something happens. I go back to table 5 in the Steel Industry Authority report. For an industry that was being bailed out by every taxpayer with a bounty, an industry that was relying on over $1 billion-worth of capital investment to modernise it, and that required union co-operation in productivity, the record, I tell Senator Collins, is lousy. It is not a matter of percentages or percentage increases. In the half-year ended June 1984, 62,950 man hours were lost. In December 1984 the figure was 56,062; in June 1985 it was 56,789. The figure came down in December 1985 to 45,253-about which people would say, `That is good. What a great figure that is. In a six month period we had only 45,000 man hours lost'. Senator Collins —There are 33,000 workers. Senator PARER —I tell Senator Collins that that was in an industry that was not going to survive. What is wrong with people in this country when they do not recognise that sort of thing? In December 1986 the figure was 67,255 man hours and, of course, in June 1987 there was the massive figure referred to in this report, in some detail, of 359,394 man hours for the six-month period. The union commitment to the plan was to contain wage costs within prevailing community standards, increase productivity and adhere strictly to the established grievance settlement procedures. The Steel Industry Authority states on page 24 of its annual report: There is clear evidence that the number of disputes is increasing and that dispute settling procedures are not being adhered to . . . particularly . . . in New South Wales. Senator Collins, in his speech, said that the workers had every justification for going on strike because there was a challenge to common law claims under workers compensation. I would point out that, as everyone knows, that amendment was being put through by the New South Wales Government. The strike went on, the competitive structure of the steel industry was damaged, and the reliability of the steelworks was affected. The strike achieved nothing, because the New South Wales Government rammed the legislation through the State Parliament. I would question whether disputes of this nature are legitimate. There are other ways of protesting, yet Australia has become so used to political protest by strikes, with people taking no account of the effects upon their fellow workers, on jobs and families. Like the road toll, strikes are accepted. If there is a political problem there is political protest by strike. Look at the maritime industry in New South Wales. Disputes occur every month because the maritime unions do not like what happens in South Africa. No account is being taken of Australia's competitiveness, the effects on the balance of payments, families and children. Senator Burns —What happens to the blacks over there? Senator PARER —I am pleased to hear Senator Burns interject on that issue. It is not the unions' role to act on foreign affairs. I would have thought that that was the role of this Government and of the Minister concerned. From the information I have in Queensland, I understand that one of the major reasons that we still remain a `branch office' State is the actions of Senator Burns and the people in his union. Over the past six months unions have effectively sabotaged the steel industry plan with a disastrous 10-week strike to which I have just referred. The dispute comprised go-slows, lightning strikes and bans designed to disrupt exports. If that is not sabotage of this country, I will walk to Bourke. This was occurring when we as a nation, month after month, were incurring record balance of payments deficits. Even the Port Kembla maritime unions did their destructive bit by delaying the movement of ships in the port. It is worth referring to some remarks made by Senator Button on this issue. He went to Wollongong when the Steel Industry Authority was set up and said that Wollongong was a town of doom and gloom, and so it was. The question was whether the industry had a future, and whether there was a formula to do something about the problem. Certainly Senator Button did his best to fix it up. Senator Button said that he was angry, and that what he was angry about was that when he first went to Wollongong there was a sense of doom and gloom, but that when he returned the atmosphere had changed significantly. He then said: I believe that BHP has worked harder at industrial relations issues than ever before in its history. It's just tragic that this `three steps forward, one step back' breakdown is there again. Really, the unions targeted Wollongong to make their point against the NSW government. That might be all right from their point of view but it's not from mine because the steel industry has so many downstream implications for other industries. He continued a little later: Those things have all been set back by the disruption- he was talking of the possibility of new industries going to Wollongong- and a lot of it is just political. Now, I don't mind that. But I've always had a detestation of educated-I don't know whether you would call them middle-class or not-but people manipulating for purely personal reasons. I think that's what happened. Some of the things some people said were plain stupid . . . What has been done there really puts at risk the jobs of the steelworkers, their children's future and the town itself. All that from Senator Button! Senator Button took the view, a view not recognised by the Australian Democrats in their remarks, that where there was blame one should not be fearful of apportioning it: If the blame is at the feet of management, then put it on management. I would not object to that. But when a case such as this puts the whole steel industry at stake, with a plan that was excellent-I have said that a number of times-such a situation cannot be tolerated. It is not good enough for Ministers just to say that they do not condone or support destructive actions by these lunatics-and they are lunatics because they are putting the industry, probably one of the great industries in Australia, at risk and the people employed in it. It is worth quoting remarks made by Senator Walsh today in answer to a question. He said: . . . I agree that it is deplorable that, after the company has met its obligations in terms of investment-indeed, in terms of quantity it has more than met its obligations under the plan-and the Government has met the obligations it accepted . . . It was a tripartite agreement. It involved three parties and two of those parties had met their obligations. Senator Walsh continued: . . . the work force is actually letting the agreement down. I think that is very bad. If the people concerned are interested in keeping their jobs, they had better lift their game in comparison with what it was in the June quarter. Those were the words of Senator Walsh. After all, we have a Labor Government which is the political arm of the trade union movement. The people of Australia who are paying the bounty, BHP which has made the investment, and the workers whose jobs are at stake are sick and tired of pious words. Those who are sabotaging a good plan should be accountable for their actions. That a few people can wreak this sort of carnage on a vital Australian industry is criminal, and that the Government can sit back and do nothing is a scandal. Senator SCHACHT(South Australia)(5.43) —I wish to speak in this debate-- Senator Vanstone —I raise a point of order, Mr Acting Deputy President. Senator Childs, in his speech, indirectly, and in the closing minutes of his speech directly, implied quite improper motives to Senator Lewis and the Opposi- tion-- Senator Richardson —That is not a point of order. Senator Vanstone —I am getting to my point of order-in bringing this matter forward. Accordingly, if that is to be the tone of the debate, I think that Government senators should be here to listen to the debate, and I draw your attention to the state of the-- The ACTING DEPUTY PRESIDENT(Senator Morris) —There is no point of order. Senator Vanstone —I draw the Chair's attention to the state of the House. (Quorum formed) Senator SCHACHT —When I saw the terms of the matter of urgency I was amazed that, in view of the importance of the steel industry to Australia, Senator Lewis could draft the motion in such a destructive way. The language used in the motion seeks to give the impression that the steel industry is being destroyed only by the trade union movement. First of all, I reject that completely. The facts and figures in the Steel Industry Authority report show that whatever problem there was earlier this year with industrial disputation at Port Kembla in particular, this was not reflected at Newcastle or Whyalla. This sort of motion shows that in many ways the Liberal Party of Australia and the National Party of Australia have not moved out of the nineteenth century in their attitudes to industrial relations. They still see industrial relation on a master-servant basis, and not on the basis of equality or of people providing labour to help build things in Australia. Senator Sheil —What about equality under the law? Senator SCHACHT —That is a typical attitude of a National Party senator from Queensland where the Parliament is a mockery of the Westminster system and the electoral system is the worst in the Western world. For Senator Sheil to cite equality under the law to the Australian Labor Party is a joke. He should clean up his own State first and then we will have the basis for an equal debate. My next point about the steel industry is the philosophy that this Government has taken in industrial matters. I come from a State where, during the late 1970s, the shipbuilding industry was wiped out in Whyalla by the inaction of the Fraser Government. Fortunately for Australia, and for Whyalla and the steel industry in particular, the Fraser Government was defeated in 1983. Had it not been defeated and had it stayed in office, we would not have a steel industry operating in Whyalla now. That is clear because of the laissez-faire attitude of the Liberal Party, which does not want to be involved in any way in helping industry. I think that the people of Whyalla have realised that on reflection in recent years. The 70 per cent vote for the Australian Labor Party in Federal elections shows that the people understand that their future, their security, involves having a Labor government in Canberra, not a Liberal government, such as the Fraser Government. Certainly, the steel industry plan has resulted in a loss of jobs in Whyalla. The number of employees in the steel industry has dropped from 6,400 to just over 4,000 at the moment. Certainly we in the Labor Party regret those job losses. But if it were not for the steel industry plan there would not even be 4,000 jobs in Whyalla-there would not be any jobs in Whyalla, Newcastle or Port Kembla in the steel industry at all. The steel industry plan devised by the Minister for Industry, Technology and Commerce (Senator Button), saved the steel industry in this country. I heard Senator Parer say that he thought that when the plan was initiated it was a good one. That is an interesting statement when one considers the Press statement, issued on 11 August 1983, from Senator Peter Rae, the then shadow Minister for Industry and Commerce. Of course Senator Rae is no longer a member of the Senate but I understand that he is now a Minister in the Tasmanian Government. His Press release is headed `Government steel industry package a failure'. It goes on: The Labor Government's Steel Industry package will be not only a disappointment to those involved, but a disappointment to Australia. Labor promised us `a viable and efficient steel industry', and clearly a long-term, integrated approach was called for. Senator Rae then listed what he considered to be all the failures of the plan. I will not list them in the short time that I have available, but I will seek leave of the Senate to incorporate this Press statement of 11 August, 1983. Leave granted. The document read as follows- GOVERNMENT STEEL INDUSTRY PACKAGE A FAILURE The Labor Government's Steel Industry package will be not only a disappointment to those involved, but a disappointment to Australia. Labor promised us ``a viable and efficient steel industry,'' and clearly a long-term, integrated approach was called for. By comparison, Senator Button's plan: fails to achieve any solution to the problem of making Australia's steel industry more competitive and more profitable. fails to ensure that steel consumers in Australia can look to the future with any degree of long-term confidence. fails to stimulate confidence for long-term investment in steel industry areas. fails to grasp the nettle on the difficult question of developing country preferences; it has only gone part of the way. fails to provide for creation of new employment opportunities. fails to provide stability and certainty in industry policy. fails to provide a wages structure which will make the steel industry competitive again. It is consistent with this Government's attitude that ``the down-turn in Australia's manufacturing industry is permanent, irreversible, and structural''. In their stated view, ``it is not temporary, or to be rectified by tariffs, wage freezes, bounties, quotas, or other fiscal measures''. The Opposition believes that the matter is of such tremendous importance to the long-term future of Australia that we had hoped that, with the combination of the temporary assistance for steel provided by the former Liberal Government, and with adequate time and consultation, the new Government could have come up with a long-term solution. The Opposition has been careful not to attempt to hassle the Government into fulfilling their rash election promise of a steel industry solution within one hundred days. Even though they have had more than half as long again, the Minister, Senator Button, has come up with not a solution, but with a steel version of the curate's egg. What the Government has achieved is some protection of existing employees, but virtually no protection of continued employment opportunities in the steel industry. The amount of investment is not much more than one quarter of that originally assessed by BHP as being necessary, and will not ensure the total modernisation of the Australian steel industry. The fact that the package is of five years duration only means that this Government has adopted a stop-gap approach which compares unfavourably with the previous Government's long-term provision for the restoration and re-structuring industries. There is an absolute need for certainty and stability in policy making. This short-term proposal does not provide that. The best thing that can be said for it is that the productivity undertakings represent, potentially, a major breakthrough. Although there is virtually no sanction, there has been a recognition by the trade union movement that, without productivity, protection by way of bounties, quotas, tariffs, and the like, can create a dangerous illusion, leading to the destruction of competitiveness of industry, and thereby its long-term existence, and the jobs which it provides. It is most encouraging to see that the trade union movement is recognising that the quid pro quo for protection must be productivity increases. Nevertheless, the unions have offered very little indeed. They are still demanding-and the Government has agreed to-4.3 per cent wage increases for the first six months of this year, and full wage indexation beyond. That will lock Australia's steel industry into its current crisis of unprofitability and lack of competitiveness. While Australia's steel workers are taking a 4.3 per cent wage increase for six months alone, United States steel workers have agreed to a 9 per cent cut in wages. They will forgo cost of living adjustment for a year, and these labour cost-savings are being re-invested in the industry. That is a genuine contribution by unions to future growth and new jobs. The Government proposals in relation to anti-dumping procedures and in particular, the speeding up of the process of making information available upon which applications can be based is to be welcomed, and carries on the process commenced under the previous Minister, Hon. Andrew Peacock. But over all, this vital industry, employing over 25,000 Australians, and so central to the competitiveness of Australian industry as a whole, is being locked into uncompetitiveness. An effective policy should have gone one way or the other-either temporary protection during the crisis, or a policy enabling full re-structuring of the industry. Senator SCHACHT —Now that that is on the record, I am sure honourable senators will be interested to compare it with Senator Parer's remarks about the steel industry plan being very good. However, Senator Parer then went on to say that that plan had been destroyed by union sabotage within the last few months. I wish to deal with Whyalla specifically, because it has not been mentioned by any honourable senators opposite. They have all attacked the workers at Port Kembla. When one looks at the industrial relations record of Whyalla, one sees that throughout the whole period of the steel industry plan there has been a very low level of man hours lost. In fact, for the quarter ended June 1987 only 2,400 man hours were lost. This compared with 4,400 man hours lost in December 1984. All these figures are listed in the 1986-87 annual report of the Steel Industry Authority. At Whyalla the workers, the management and the Government have managed to ensure that the steel industry plan, under its tripartite arrangement, has worked very well. At this state I pay tribute to the trade union movement in Whyalla, particularly the Whyalla combined trade union council. I mention particularly people such as John Watson and Doug Elkins, who are senior officials of the movement in Whyalla. They have played a role in ensuring that the steel industry has survived in Whyalla and has become a basis for the future of that town. At the moment Whyalla produces about 1.1 million tonnes of steel a year, of which 54 per cent is exported. We have not heard much from the Opposition in this debate about the importance of steel as an export commodity to improve our balance of trade. We have heard plenty of speeches in recent weeks from senior spokespeople on behalf of the Opposition in the economic area, including Senator Stone and others, who have attacked this Government by saying that it is not doing enough. Here we have the steel industry plan that is ensuring that, for example, over half the production of steel from Whyalla is exported. I think credit should be given, not only to the Government but also to the workers and the management at BHP to ensure that the steel is produced and sold overseas. Senator Walters —What about the protection they have? Senator SCHACHT —Senator Walters interjects `What about protection?'. The Opposition was in government for 23 consecutive years and then for another seven years. It had 30 years as the Government of this country. For all that period it was responsible for the highest level of tariff protection, which, in the end, led to the destruction in many areas of the manufacturing industry. Senator Walters's Party has a dreadful record; one of which she should be totally ashamed. It did nothing in government to ensure the long term, viable future of manufacturing industry in Australia. To make an offhanded comment about protection levels is similar to the level of content of the urgency motion moved by Senator Lewis earlier today. We will not excuse the fact that there have been serious industrial problems at Port Kembla in the last few months. This is made very clear in the report of the Steel Industry Authority. I wish to quote some of the relevant parts from that report. I support the report because I think it is fair and even-handed. It criticises where criticism is due-not only the unions but also management. It states: . . . the Australian steel industry has the potential to become the world's lowest cost steel producer and potentially a competitive exporter. The Whyalla plant is already obviously reaching that point. The report goes on: However, the realisation of this potential lies almost entirely within the hands of the industry itself. It will require the effective and enlightened management of both capital and labour resources to place the industry's future development on a sound footing. I support that. Any reasonable person involved with the long term future of the steel industry in Australia must support that. The report then goes on to say: We have been encouraged by the improvement in the industrial relations situation in Port Kembla in recent weeks but much more remains to be done. Again, nobody in the Labor Government would disagree with that. When Senator Parer and others quote Senator Button and the Minister for Finance, Senator Walsh, that is what they are talking about. There has to be an improvement. The improvement will not be reached by honourable senators opposite using pejorative language to attack the trade union movement in Port Kembla. That is an eighteenth century or nineteenth century style of industrial relations. It did not work then and it certainly will not work in the latter part of the twentieth century. Despite this problem-this hiccup, as Senator Collins mentioned-the report also points out that raw steel production for BHP for the year was 6.1 million tonnes, 7 per cent lower than in the previous year. This obviously reflects the problem, not only of industrial disputation but also of management in getting new equipment to work efficiently. But despite that problem it also says that the production of steel, which was at 89 per cent capacity for the current year, is well above the Organisation for Economic Co-operation and Development (OECD) average of 67 per cent. So the Australian steel industry is still the most efficient compared with the OECD average, something which we should be proud of and which we should be promoting. To put the strike action into the context of the overall steel industry, its impact on Port Kembla must be emphasised. The report states that strike action intensified during the last three months of the year, with 274,795 working hours being lost, over 90 per cent at the Port Kembla works. Newcastle and Whyalla were not involved. Honourable senators opposite have given no recognition to the Newcastle and Whyalla works for their excellent industrial relations record during this period. They just take the unfortunate circumstances of the industrial dispute which has now ended at Port Kembla and Wollongong and use them to destroy the image of the steel industry. The motion before us today is what is destructive to the steel industry; it is not the trade union movement. I am surprised that the Deputy Leader of the Liberal Party in the Senate, Senator Lewis, could have put his name to the urgency motion, which, in my view, has done more to damage the image and the future of the steel industry than anything management, unions or the Government have done. The motion should be soundly rejected by the Senate. Senator LEWIS(Victoria)(5.57) —in reply-In closing the debate I will start by dealing with Senator Collins, who accused me of quoting selectively from the Steel Industry Authority reports. As the opening speaker to my motion that, as a matter of urgency, there is a need for the Government to bring to an end union sabotage of the steel industry plan, I sincerely did not believe that speakers for the Australian Labor Party and the Australian Democrats would ignore, in effect, the parts of the report which clearly refer to the desperate state of industry disputation in the steel industry and would then attack management. I did not expect that honourable senators would take this report, turn it on its head and extract selectively from the report quotations which enabled them to attack Broken Hill Proprietary Co. Ltd (BHP) and its management over a dispute which, as is acknowledged, was not between the unions and BHP but between the unions and the New South Wales Labor Government. The management of BHP had nothing to do with the dispute. There was nothing it could do about it. Yet Senator Collins and the Democrat speaker used the report to attack BHP management. I will quote some parts of the report now to make the situation clear. I will certainly not quote the report selectively. I quote from page 2 in relation to industry productivity: In the three months to June 1987 the industry's productivity had declined further to an average of 245 tonnes per employee per year. The level achieved in 1985 by BHP was approximately 300 tons per employee per annum compared with the original minimum target of 250 tons per employee per annum. Overseas levels in the better integrated facilities are 300-400 tons per employee per annum. I have quoted the whole paragraph. Productivity has declined drastically. The report refers to overseas levels of 300 to 400 tons but some companies, for example, a Japanese company, produce about 550 tons per employee per annum. The acknowledged aim of the steel industry plan was to get productivity in the steel industry up to about 350 tons per employee per annum. Yet the report talks about an average of 245 tonnes per employee per annum. That is in relation to productivity. In relation to industrial disputation, I will quote three-quarters of the paragraph. I will not bother with the first sentence. It states: In the three months ending June 1987 alone 274,975 man hours were lost, over 90 per cent of which were at the BHP Port Kembla steelworks. Based on the industry's performance in the June quarter 1987 it is clear that the level of industrial disputation at Port Kembla is now much worse than it was during the three years preceding the plan's inception. Indeed, the monthly average of man hours lost at Port Kembla during the June quarter was 84 per cent higher than that in the six months to November 1981, which was the previous worst period for industrial disputes at Port Kembla. Of course there were some problems with technical production. No one on this side of the chamber has in any way denied that. It is made clear in the report. But this is massive disputation which has nothing to do with the management of BHP. Yet Labor Party and Democrat senators come in here and say that it is management's fault. I quote the final paragraph on page 3 which summarises this matter: While recognising the significance of capital investment- over $1.2 billion was invested by BHP- to the long-term viability of the domestic steel industry, it is the management of the industry's labour resources that is of greatest immediate concern to the Authority. I will repeat that for Senator Schacht, who is still in here, I am pleased to say, and for Senator Childs. Senator Collins has left the chamber. I repeat: . . . it is the management of the industry's labour resources that is the greatest immediate concern to the Authority. Senator Schacht —We agree with that. The management-- Senator LEWIS —It is the management of labour resources. It is the unions that the report is talking about. Senator Maguire —Who does the managing? Senator LEWIS —How on earth can the management manage the union problem? Senator Maguire —You torpedoed yourself on that one. Senator LEWIS —I will find another quotation for honourable senators opposite in a minute. The report goes on: The effectiveness of the labour force at all levels is a prerequisite for the effectiveness of the industry at large and represents a major factor upon which real productivity gains are dependent. Page 4 states: The present level of industrial disputation within the steel industry is a clear indication that some of the parties at least have lost sight of their common goals. Let me deal with Senator Childs. For Senator Childs to come in here and impugn my motives in bringing this motion before the Senate is unbelievable. My association with Senator Childs goes back to the time when he first became a member of this Parliament. I am absolutely staggered that he should suggest that I would put forward such a motion in order to have some effect on the price of BHP shares. It is absolutely beyond my comprehension. It is one of the most disgraceful allegations I have ever heard. Senator Chaney —It is a breach of Standing Orders. Senator LEWIS —It is a clear breach of Standing Orders. It is an absolute disgrace that Senator Childs should say that about me. I am very cross about it. Senator Childs —Mr Acting Deputy President, I take a point of order. I did not say what the honourable senator claims I said. If he wants to rave on about it, he might well do so, but I did not say that at all. He is quite wrong to raise it. The ACTING DEPUTY PRESIDENT(Senator Morris) — Order! There is no point of order. Senator LEWIS —Senator Childs can claim that he has been misrepresented, but in all of his speech I did not hear him say, `If Senator Lewis believes that I did say that about him, I withdraw'. He did not have the decency to say that. I am surprised and disappointed that Senator Childs would impugn my motives in bringing this matter before the Senate. This motion is the truth. These unions have been sabotaging the steel industry plan. Australian Labor Party senators are saying that this is an attack by us on the union movement. But let me quote from what Senator Button, a member of the Labor Party, said in this chamber on 26 March this year. In relation to the dispute at Port Kembla, he said: I am aware of the dispute at Port Kembla . . . I agree entirely that it is an absurd dispute, that it is a threat to Australia's reputation as a supplier of raw materials and manufactured goods, and that it is at odds with the best endeavours that this country should be making in industrial relations. The Minister for Industry, Technology and Commerce said that. Government senators are saying that we are attacking the union movement. But that is what their Minister, Senator Button, said. A newspaper article by Robert Garran, published on 26 May under the heading `Button tells steel union it is putting jobs at risk', stated: He told the union: ``The number of man-hours lost in 1986 was the highest since the (Government's) plan began. On these figures we are heading back towards the pre-plan levels of disputation''. That was said by Senator Button-not by a member of the Liberal Party of Australia or the National Party of Australia. An article on 8 August this year was headed: `Button blasts unions for drop in steel production' I see that Senator Richardson has left the chamber; he could not take it. I repeat that the article was headed: `Button blasts unions for drop in steel production' Yet Government senators say that we are conducting an attack on the union movement. We are pointing out what is going wrong. We are attacking the Government, not the unions. We are attacking this Government for not getting on with its job. Finally, let me quote from what Senator Walsh said this afternoon in answer to my question about this. I will read it in full. He said: I was asked what the Government can do about it. Firstly, I agree that it is deplorable that, after the company has met its obligations in terms of investment-indeed in terms of quantity it has more than met its obligations under the plan-and the Government has met the obligations it accepted in 1983, the work force is actually letting the agreement down. I think that is very bad. If the people concerned are interested in keeping their jobs, they had better lift their game in comparison with what it was in the June quarter. Who said that? It was Senator Walsh, as the Acting Minister for Industry, Technology and Commerce, who said that this afternoon. Those opposite attack us, saying that our motion is an attack on the union movement, yet their own Ministers have attacked the union movement over this activity. This attack is not on the union movement. This attack is on the Hawke Labor Government and Minister Willis for failing to introduce into this Parliament the industrial relations legislation that he said he would introduce in May this year. We have seen neither sight nor sound of it since the Prime Minister (Mr Hawke) decided to call an election 12 days after Willis said he would fix it. It is Willis that we are condemning when we put forward this motion of urgency which states: The need for the Government to bring to an end union sabotage of the steel industry plan. Question put: That the motion (Senator Lewis's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 38 —— Majority . . . . . . . . . 7 —— Alston, R. K. R. McGauran, J. J.Archer, B. R. MacGibbon, D. J.Baume, Michael Messner, A. J. Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Patterson, K. C. L.Calvert, P. H. Puplick, C. J. G.Chaney, F. M. Reid, M. E.Chapman, H. G. P. Sheil, G.Crichton-Browne, N. A. Short, J. R.Durack, P. D. Stone, J. O.Hamer, D. J. Vanstone, A. E.Hill, R. Walters, M. S.Knowles, S. C. (Teller) Watson, J. O. W.Lewis, A. W. R. Aulich, T. Jenkins, J. A.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P.Burns, B. R. McLean, P. A.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R. (Teller)Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cooney, B. Ray, RobertCoulter, J. R. Reynolds, M. E.Crowley, R. A. Richardson, G. F.Devereux, J. R. Ryan, S. M.Devlin, R. Sanders, N. K.Evans, Gareth Schacht, C. C.Foreman, D. J. Sibraa, K. W.Gietzelt, A. T. Tate, M. C.Giles, P. J. Walsh, P. A.Haines, J. Wood, W. R.Harradine, B. Zakharov, A. O. Teague, B. C. Button, J. N.Bjelke-Petersen, F. I. Beahan, M. E.Tambling, G. E. J. Cook, P. F. S. Question so resolved in the negative. The PRESIDENT —Order! For the information of honourable senators I table a report from the Joint Standing Committee on the New Parliament House relating to proposed works in the Parliamentary Zone. Debate resumed. Senator CROWLEY(South Australia)(6.17) —Before the debate on the National Health Amendment Bill (No. 2) 1987 was interrupted, I was referring to the altered provision for payment to pharmacists by the Department of Community Services and Health for the pharmaceuticals that they dispense. I had mentioned the first proposal, that allows for the advantages of modern technology-floppy disks, modems et cetera-used by pharmacists to be provided to the Department so that more rapid repayment and processing of claims can be put in place. As well as the changes contingent on that new technology, there is also an acknowledgment by the Government of its appreciation of people moving to that process of 2 1/2c for each pharmaceutical benefit processed to be paid to pharmacists. I had just come to the point where I wanted to acknowledge the pharmacists who had so readily preferred to go that way. In fact the percentage of pharmacists preferring to exercise that option has increased from 11 to 37 per cent. The second method goes to a random sampling of prescriptions submitted but, to ensure a proper and adequate payment to the pharmacists, they are able in that process to have 10 per cent of their claims treated in the full processing way, with the remainder to be reimbursed by the sampling method. My understanding is that considerable thought and planning has gone into that sampling process to ensure the fairest and most reliable return to the pharmacists who choose to adopt that process. I think some other pharmacists will continue to provide their lists of prescriptions in the way they have previously done. Some honourable senators opposite have suggested that owners of small pharmacies would not be interested in investing in what they said was expensive high technology, although I understand that technology can be geared to the size of the business concerned, because there was a disadvantage for them if they did not exercise their option to go into the high technology systems of repayment. I think it needs to be noted that about 37 per cent of pharmacists prefer to exercise their option under that process. Again a further percentage-I do not have the figures for that-will be doing their submissions under the sampling system. Those who remain will not be dramatically disadvantaged, if at all, because the more time consuming process that they will be treated with will be offset by the reduced number of claims in that full processing method, because so many other pharmacists are exercising the other two options. The Government is very concerned to address the difficulties of the considerable backlog that had accrued over the years. Whilst I think it was reasonable to criticise that delay, I think it is not valid to continue that criticism in the face of these proposed changes that the Government has put in place precisely to deal with the problem that it has been more than aware of. So I think it would be more beneficial at this time to see the outcome of these proposed changes and to see whether the turnaround time for repayment is as the Government expects it will be, of 20 or 21 days or perhaps a few more days, for the full processing system. I would be surprised if it were not reduced to that period, given the very excellent record of repayments under the Medicare scheme. The turnaround time there is very short and very much on the predictions that the Government estimated. I do not have any sense that the Government is falsifying the turnaround time or in any way wanting to confuse people or to misrepresent what will be the facts. In fact the Government will be watching it very closely, precisely because of its concern at the delay in repayment. I think it is a very proper concern. I think the criticism that has been mounted about that delay in the past was proper and right, and I think this legislation should be acknowledged as a proper and right attempt to address that. The final point I want to make goes to the other and very important consideration in this area of legislative change, and that is to ensure that people in need of medication are provided with that medication in a financially manageable way. We have here one of those lively tensions between sufficient and proper return to the pharmaceutical industry, to encourage development of drug manufacturing in this country and to provide sufficient research incentive for those developments to proceed and to grow in this country, and the cost to those who need medication. I suppose by way of an aside I can recall to the Senate the case of Fauldings, which has a large presence in South Australia, which has done very well over recent years with some of its pharmaceuticals. So it is perfectly possible for drug companies in Australia to be successful. At the same time that proper return to the pharmaceutical industry has to be balanced against the cost to the people in Australia who need medication. The pharmaceutical benefits scheme has, I think, always managed to keep that balance properly in control. As well as the recognition of the changes in November 1986 that there would be considerable savings to the Government if the cost of a pharmaceutical prescription were increased for the majority of people-that is those who can afford to pay and who had very little need to attend doctors for medical treatment-those savings to government could then be put to advantage those people who are chronically ill or who had large claims for medication because of a number of sick children or, as I mentioned, because of chronic illness. The safety net provisions introduced by this Government very properly, and I think very adequately, addressed that, and will ensure that nobody will be dramatically disadvantaged financially in having to seek proper medical treatment. So in all ways I think this legislation addresses the issues of concern in the pharmaceutical benefits area. I think it provides a very reasonable and proper balance. It is important that sufficient flexibility is allowed for continuing encouragement for industries in this area in Australia. We do not want to become an importing only country in this area. We have evidence that that does not have to be the case. At the same time, we want systems that will properly test new medications and will properly provide even very expensive medication. I again draw the Senate's attention to the example cited by Senator Puplick. It is one of a number that go to the Government's proper consideration on compassionate grounds when medications proposed in certain areas are very expensive. The Government has always acknowledged the propriety of sometimes allowing expensive medications to be provided. But it also properly says that if it does that for all medications with no constraints the growth of expenditure in this area would continue to rise and would no doubt top the $1 billion mark-a very significant and large outlay in costs for government. It properly wants to consider restraint in this area. This piece of legislation does canvass the areas. It proposes changes that I think will address the difficulties that have existed. It will encourage a more rapid return to the pharmacists concerned and it will make sure that restraints of costs to users of pharmaceuticals are kept within reasonable bounds. For those reasons I am pleased to support this legislation. Senator WALTERS(Tasmania) —by leave-Mr Acting Deputy President, I make a personal explanation on two counts arising from Senator Crowley's speech. The first concerns her implication that, following my speech, I was going to get up and leave the chamber. When I first came to this place some time ago it was pointed out to me that that was not the correct thing to do and that, indeed, it was impolite to leave the chamber and not listen to the person following one. I do not make a rule of behaving in that way, and Senator Crowley's implication that I would leave the chamber in that way was, I believe, quite wrong. Senator Knowles —I think it is what she does. Senator WALTERS —Yes, I know that Senator Crowley makes a rule of doing that, but I do not. I come to the second count. Senator Crowley accused me of making gross criticisms against the Pharmaceutical Benefits Advisory Committee. In no way did I in my speech make any such criticism. My criticism was against the Government's legislation and against the Minister for Community Services and Health (Dr Blewett), who requires that Committee to give consideration to alternative forms of treatment, apart from drugs, such as surgery. That was the criticism I was levelling. There was no criticism on my part regarding the Pharmaceutical Benefits Advisory Committee. I just wanted to make that very clear. When Senator Crowley was challenged by Senator Peter Baume to give an example of what she would think would be an alternative measure to surgery she said the treatment of warts, of all things-as if anyone could possibly expect that the treatment of warts would be an alternative treatment to surgery. I think that in these respects Senator Crowley was completely out of order. Sitting suspended from 6.28 to 8 p.m. Senator SHEIL(Queensland)(8.00) —The National Health Amendment Bill (No. 2) 1987 is a piffling Bill, yet the Senate seems to have had a certain amount of indigestion getting it through. It does only three things: it updates and modernises the way in which the Government pays chemists for supplying prescriptions to people; it enlarges the Pharmaceutical Benefits Advisory Committee; and it gives the Minister, unilaterally, the power to cross drugs off the pharmaceutical benefits list. It really represents the machinery by which the pharmaceutical industry can stagger through the quagmire of government negotiations that it has been going through for many years. I have been on various health committees, both in government and in opposition, when representations have been made by both pharmaceutical manufacturing companies and pharmacists when they have been in trouble year in, year out. They have argued with the Government about the administration of the pharmaceutical benefits scheme. I remember that, initially, it was a most generous scheme for ordinary patients, pensioners and veterans. It is a fine example of how a government can promise the world, with the best intentions in the world, but find, eventually, that it cannot deliver and so have to restrict the service. Initially, a little blue book was put out and that contained an extensive range of the drugs that were available under the pharmaceutical benefits scheme. Only a few of the drugs were printed in red. They were usually the most expensive and doctors had to be more careful in prescribing them. That was not sufficient to restrict the amount of prescribing that was done, so doctors had to apply for permission to prescribe the more expensive drugs. It got harder and harder to get permission to do that. The allowance for veterans was probably the most generous, which I think was quite normal. Veterans were entitled to all sorts of items which we used to refer to as grocery lines-Kleenex tissues, cotton wool, Aktavite and so on. Doctors used to prescribe those items, but veterans made the error of taking the items down to the pub and flogging them. One could not blame the Department for putting restrictions on those sorts of things. Eventually, the doctors had to write to departments to get permission to prescribe them. I can remember how the pharmaceutical companies fell over themselves to get items listed on the pharmaceutical benefits list. The minute the items were listed, the doctors were smothered by a plethora of drug retailers who visited them saying, `Here is a new, modern and better item for you to prescribe'. Even the pharmacists had difficulty in keeping up with the rapid turnover in the drugs that were available under the scheme. Naturally, the costs escalated all round and the Government started to restrict the service, what the chemists could do and what the pharmaceutical benefits companies could do. The rest is just a commentary in time and space. As I have said, the Bill represents the latest mess-up in an attempt to rectify previous mess-ups. The industry welcomes the Bill, as it does ease its present pain a little. The Opposition does not oppose the Bill, but it seeks amendments to certain clauses of it. The pharmacists are still keen to negotiate with the Government, despite their years of experience in finding that the Government is not the most congenial partner with which to work. Pharmacists, like the doctors, prostituted their profession when they mistook the Government's intentions as good. I am sure that the Government's intentions are good, but the effects of the policy are all bad. This goes back to the old proverb: `He who pays the piper calls the tune'. If the Government is paying the bill, the Government can call the tune. There is another old proverb to this effect: `That which the Government wishes to control, it first subsidises'. That is what has happened in this instance. The subsidy that the Government provided in this case became built into the chemists' economy. In other words, the chemists could not function without receiving the money. Once they were in that position, the Government could start dictating terms and conditions. As the years have passed, those terms and conditions have become progressively more stringent and chemists' incomes have been gradually squeezed. In order to survive they have had to enter into competition with supermarkets. Patients found that to get to a chemist's dispensary they had to wade through a maze of supermarket-type display trolleys and other wares that they were selling. I am sure that many honourable senators have seen how chemists go out on to the street with microphones and act like circus barkers as they advertise their wares and drum up business. The pharmaceutical companies were also pinched to the extent that research and development left Australia. There was a time, not so long ago, when we had no capacity for research and development in the pharmaceutical area. That dangerous situation has been mentioned earlier in the debate. It has important defence connotations for Australia. I can remember that at one time the Government felt that it needed a window into the pharmaceutical industry so that it could have some sort of control over the costs of buying raw materials, manufacture and distribution. It went so far as to buy a pharmaceutical company at an exorbitant cost. After a bit of experimentation with that pharmaceutical company, the Government eventually sold it at an enormous loss. I can also remember that the Government opened up the Commonwealth Serum Laboratories (CSL) which were created to produce biological products only-things such as snake and spider venoms; non-commercial type products. The law was altered so that CSL could make non-biologicals and virtually go into competition with pharmaceutical companies. The last method of paying chemists, and there have been many over the years, was Pharmpay. That was introduced in 1985 and lasted about a year. For the last year the Government has been implementing the program that is contained in this Bill. But by the time Pharmpay became a shambles, with delayed and inaccurate payments, there were 51 million prescriptions in a gigantic backlog. The delays in payments to chemists were quite disastrous to their businesses. Chemists have to pay for their stock as they get it. They get discounts from pharmaceutical companies if they pay their bills within a certain time. But, of course, if the Government has not paid the chemists they are unable to get the discounts. I might add that the Government does not take account of the discount a chemist gets when it works out the price that it will pay the chemist for pharmaceuticals. The chemists found that, in order to keep their stocks alive, they had to obtain a bank overdraft. They had to pay interest on the overdraft and, of course, that interest was not taken into account when the Government worked out how much it would pay the chemists. The chemists found that when the delays in payment went over one, two or three months-I think that 102 days was the championship date that was reached-the banks tightened up on their overdraft ceiling and the cheques of some chemists bounced, which must have been very embarrassing for them. Some of them actually went broke. I say to the Minister: The Government should pay its bills promptly. A Bill which is designed to ensure that is before the House. If the Government does not pay its bill on time, at least it should pay interest on the money that it owes. What the Government did to extricate itself from the problems it was experiencing with the big backlog was to start an averaging payment method for prescriptions. This meant that it looked at the last three or four months of a chemist's accounts that were reasonably accurate. It took his prescriptions, threw them in the air and worked out an average amount which he would be paid. This method was very inaccurate and one can bet that mistakes were made. It would be very disadvantageous for a chemist to have, for example, a seasonal business. This Bill proposes a new method of payment which is combined with the old ones. Fortunately, chemists are rapidly becoming computerised. They can use the electronic data transfer method which is the centrepiece of the Government's solution and the centrepiece of this Bill. The preferred method is called the claims transmission service (CTS), which uses compatible floppy disks. In other words, the chemist has a disk on his computer that is compatible with that of the Government and this will enhance the rapidity with which he can work out his claims. To encourage the chemist, the Government is willing to pay 2.5c a script for the next two years provided that chemists have joined the CTS by 1 November. As that date has already passed I hope they are given a little longer because there are 5,000 pharmacies in Australia. When the Bill was introduced I think about 1,700 pharmacies had decided to join. From what I have heard, an avalanche of chemists have tried to get into the system so perhaps the number is now nearer 5,000. But it would be a little unfair, even if the Government had been running this system for about a year, if all the chemists were not given a chance to join. One could understand how difficult it would be for a small pharmacy when the chemist, who does not really understand computers, has to be talked into installing one. In an ordinary little pharmacy the incentive of receiving 2.5c a prescription would just pay for the running and maintenance of the floppy disks. So the chemist will not be making a profit out of the incentive that is offered to him. The second payment system option offered is called the alternative method whereby the Government guarantees that it will pay pharmacists within 25 days. This system involves random sampling, and again one can bet that that system will have mistakes in it. That is the measure the Opposition hopes to amend by inserting a sunset clause in the legislation. Thus the alternative method of random sampling will cease to be in effect at the end of two years. The third payment method is the old manual method which has been in existence since time immemorial. The Government says it will pay pharmacists within 30 days. I presume the Government feels that it will be able to pay them within 30 days because the load will have been taken off it with most of the work going on floppy disks. This method of payment will still be dicey though. The important thing in all of the three systems of payment the Government will allow is that the scripts will still have to be sorted and numbered. In other words, the chemist will still be stuck with the same amount of work even though he will have to feed everything on to floppy disks. In all, the chemist's costs have increased. With the introduction of this CTS system the Government says that it will save about $6m, but to make sure it does-I have heard this but I have not had it confirmed-it will close the Adelaide and Hobart processing centres. That means the Government will lose some flexibility in its processing, particularly in trying to overcome log-jams and strikes for example. In other words, claims will no longer be able to be redirected through other States when there are problems with the centralised computers. The second part of the Bill deals with the reorganisation of the Pharmaceutical Benefits Advisory Committee (PBAC). Again this measure is supposed to reduce costs; It has nothing to do with better health or more efficiency-although that is what the Government claims. Our total health costs are over $8,000m, the pharmaceutical section of which is $800m, which the Government expects to rise to $970m. However, with the introduction of floppy disks and the restructuring of the PBAC, it will save $100m; and so this measure will cost $870m. I do not often quote a lot of figures but the pertinent figures are that pharmaceutical benefits are costing $800m this year and they will cost $870m next year. It is very good bureaucratic logic to say that we expect to save $100m and yet we wind up spending an extra $70m. The Board will be increased from eight to 11 members by adding three doctors. It will wind up with 10 doctors and one dentist and this is supposed to create more efficiency. Senator Puplick —One pharmacist. Senator SHEIL —One pharmacist. The PBAC secretariat will be enlarged and that, I suppose, is the traditional Public Service way of saving money. Allegedly this provision will mean better investigation of the worth of drugs and it will be easier to hire consultants to pursue the Government's intentions. The Government's intention is to apply a cost-benefit analysis to procedures and to the distribution and new listing of drugs. Other speakers in this debate have quoted the second reading speech of the Minister for Local Government (Senator Reynolds), who stated: The obligation- of the PBAC- to consider comparative effectiveness and cost will require the PBAC to give consideration to alternative forms of treatment, for example surgery . . . A considerable amount of attention has been devoted in this debate to just that section of the legislation, and rightly so. This kind of consideration often takes place in the medical, surgical or any other treatment of patients, but at a level between the doctor and the patient. And that is right, too, because that is the proper place to consider the costs of treatment and the most suitable treatment for a patient. This legislation is transferring that negotiation to the Government and the pharmacists, and once again the Government has the wrong bulls in the ring. In this case it has itself and the pharmacists in the ring battling it out and it should really be the doctors and the patients who are battling it out. The same thing happened with the doctors' negotiations. The Government wound up with the doctors and patients battling in the ring when the real battle should have been between the Government and the medical insurance companies. We are again going down the wrong path and I can assure the Government that this section of the legislation will cause trouble in the practical implementation of the Bill. The Government will decide the cost-benefit analysis to the patient and one can bet the Government will not consider the patients as much as the doctors would. By implementing this part of the Act, the Government will be virtually coercing doctors into using the cheapest forms of treatment on patients when perhaps other forms of treatment might be better. Finally, the Bill gives the Minister the power to remove pharmaceuticals from the list unilaterally. Obviously this is to give the Minister power to cut government expenditure in an emergency when he sees fit. It may be a necessary power. The Opposition will move an amendment to the effect that the reasons for doing this sort of thing must be tabled and the measure is to be handled much as a regulation is handled in other areas. I do not know whether the Parliament will have the power to reverse the Minister's decision if he has gone wrong. Nevertheless, I do not feel as apprehensive about that as do other people, because the Minister has responsibilities to his Party, his Caucus and everybody else and he is unlikely to do anything stupid. As a matter of fact, I think it is often a lot easier to get at a Minister than to get at autonomous government departments. One thing that I would say about this Bill and the restrictions it is putting on the the pharmaceutical benefits system is that very rich people will still be able to go outside the system and purchase their health care. However, the health care of poorer people is being whittled away. This is common to what is happening under this Government at the moment-that is, the Government is making bigger divisions between the rich and the poor than have ever been seen before. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(8.21) —I thank honourable senators for their very informed contributions to this debate. A number of views have been put forward which really are alternative strategies to the one the Government has decided to undertake. Therefore, I do not think there is any point in my entering into a full-scale debate on the different views that have been put forward. But a number of specific issues have been raised and I will comment on them briefly. Honourable senators who wish to raise more specific matters may do so during the committee stage. Senator Peter Baume raised what he saw as a contradiction between the requirement for the Pharmaceutical Benefits Advisory Committee (PBAC) to consider cost-effectiveness and the industry package announced by Dr Blewett and Senator Button on 13 September. In the Government's view there is no contradiction. The details of that arrangement are still being sorted out. The Government is committed to a new policy of allowing price increases where the pharmaceutical industry is prepared to increase its Australian activity. It is not intended that the PBAC will take account of any price premiums for Australian activity when comparing the costs of alternative therapists. Senator Baume, pursuing his interest in the PBAC, wanted to know how it would look at cost effectiveness and how therapeutic equivalence would be determined. A professional committee will be established for that purpose. There is a budget for consultants and that budget is being increased significantly. The cost-effectiveness of drugs is a very technical area. In many respects, that area is in its infancy in Australia. In the Government's view, it is better to have those matters determined by a professional body than by a committee of Ministers. Senator Sheil —The doctors have been doing it for years. Senator RYAN —We are still referring the matter to a professional committee. We are not taking over from the professionals in that respect. The legislation before us deliberately takes a broad view of cost-effectiveness, which is intended-- Senator Peter Baume —Are you saying that you will leave it to that committee and you are not quite sure how it will work out equivalence? Senator RYAN —What I am saying is that we regard it as a matter for professionals. It will not be a political decision; we will take advice from that committee. The broad view of cost-effectiveness is intended to recognise those circumstances where drugs are cheaper and better therapy than surgery and take account of quality of life issues and also side effects. The committee will comprise eminent professionals, predominantly medical practitioners, as Senator Peter Baume and Senator Sheil will be pleased to hear. Senator Puplick —I think they know better than to trust them explicitly. Senator RYAN —I am sure that Senator Puplick would agree that there is always a bit of solidarity when it comes to medical practitioners. Those professionals will be expected to take full account of the therapeutic equivalence of alternative forms of treatment. I would like to respond to a couple of points that were raised by Senator Sheil. The honourable senator raised the matter of the 1 November deadlines on the claims transmission service incentive of 2.5c. I would like Senator Sheil and other honourable senators to be aware that the Department of Community Services and Health wrote to all pharmacists four months ago drawing their attention to the offer. There has been extensive publicity of the offer in trade journals. In fact, 44 per cent of pharmacists have taken it up. Most other pharmacists do not have computers. Their business may be too small and, therefore, they really are not relevant. I will leave other specific comments to the committee stage. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 3-by leave-taken together, and agreed to. Clause 4 (Pharmaceutical benefits). Senator COULTER(South Australia)(8.26) —The Australian Democrats wish to move an amendment to clause 4 of the National Health Amendment Bill (No. 2) 1987. We are concerned that the Minister, under clause 4 as printed in the Bill, may make a declaration under proposed new sub-section (2ab) which says, in part: . . . the Minister shall have regard to any view previously expressed . . . The Minister is not required actively to seek the advice of the Pharmaceutical Benefits Advisory Committee. The Australian Democrats feel that if the Minister wishes to remove a drug from the schedule, he should actively seek that advice. We have been persuaded by the Opposition that in addition to seeking that advice, that that advice, together with the notification, should be laid before each House of the Parliament. The Opposition intends to move an amendment, that the Committee, in making reviews, should give consideration to the items covered on page 7 of the Bill under proposed new sub-section 101 (3a) in clause 8 (1). The Australian Democrats are not persuaded that it is necessary to append those conditions to the provisions of clause 4 because, as the various conditions in the clauses must be read together, the Pharmaceutical Benefits Advisory Committee would have to give consideration to those items mentioned in clause 8 (1), namely the effectiveness and cost of therapy, in providing that advice to the Minister. Therefore, I move: (1) Page 2, clause 4, paragraph (a), leave out proposed new subsection 85 (2ab), insert the following subsections: ``(2ab) Before making a declaration under subsection (2aa), the Minister shall obtain the advice in writing of the Pharmaceutical Benefits Advisory Committee in relation to the proposed declaration. ``(2ac) An advice under subsection (2ab) shall be laid before each House of the Parliament with the declaration under subsection (2aa) to which the advice relates.''. Senator PUPLICK(New South Wales)(8.29) —On behalf of the Opposition, I wish to move an amendment to the amendment that Senator Coulter has just put before the Committee. Our amendment seeks to insert a new sub-section (2aba) in the form which has been circulated in the chamber. I move: Amendment (No. 1), after proposed new subsection 85 (2ab), insert the following subsection: ``(2aba) In providing advice under subsection (2ab) the Committee shall have regard, as far as practicable, to the matters referred to in subsection 101 (3a).'' I will come back to that amendment in a moment. We agree with the two new sub-sections which are proposed in the amendment which Senator Coulter has just moved; namely, that in relation to the Minister's pending decision to remove an item from the list, he should actively seek the advice of the Pharmaceutical Benefits Advisory Committee (PBAC) and that that advice, having been sought and provided to the Minister, should be tabled in the Parliament. This is important because the Bill provides that the Minister's determination is reviewable by Parliament because it is a regulation. In other words, the Parliament will be able to disallow the Minister's determination once it has been made. We are saying that the Minister should table the advice he has received from the PBAC in order to allow the Parliament to make a more informed determination about whether there are grounds, on the basis of good scientific and economic advice, for the Minister's decision to be overturned. But to bring about this situation we believe that there are two conditions precedent. The first is that there must be contemporary evidence. The Bill seeks to insert in section 85 of the principal Act a new provision (2ab), which reads: Before making a declaration . . . the Minister shall have regard to any view previously expressed to the Minister for the purposes of this Part by the Pharmaceutical Benefits Advisory Committee and relating to the drug or medicinal preparation, or the class of drugs and medicinal preparations, as the case may be. Senator Crowley attempted to say that this means that there will be in the Minister's hands not only a view which was previously expressed but also a statement of the current position. In fact, there is nothing in the legislation to support that view. Senator Crowley's view is erroneous. The legislation refers quite clearly to `any view previously expressed'. That view may have been that the drug should have been listed in the first place-that may be the last time that the matter has come from the PBAC to the Minister-or that it should be sustained on a list. That advice may be several years old. Senator Peter Baume —They are talking about extending the patent life to 20 years. Senator PUPLICK —Indeed, as my colleague rightly points out, if one looks at the announcement made jointly by the Minister for Community Services and Health and the Minister for Industry, Technology and Commerce one sees that one of the things that were to be done allegedly to support the Australian pharmaceutical manufacturing industry was an extension in the patent life of the drugs concerned. Therefore, this pharmaceutical which may have had an extended patent life may have last been the subject of advice from the PBAC to the Minister quite some years before. This amendment says that the Minister shall obtain advice on the current position when contemplating the potential delisting of a drug. There may be another time element of importance. I refer to the time element that may elapse between either House getting round to dealing with the question of a disallowance. After all, if a drug is delisted by the Minister, it may be done at a time when Parliament is not meeting; it may be a recess period. It may well be that, by the time all the processes involving the 15 sitting days which are referred to in the Acts Interpretation Act dealing with disallowance of regulations elapse, one might be looking at a passage of three or four months or longer. Issues will arise in terms of delays and the consequences of the delisting of the drug if that delisting is subsequently disallowed in the period in which it was disallowed and before the Minister's determination was overturned. Obviously matters arise in that regard. However, we believe that there is a second condition precedent which should be part of this amendment before the tabling of the advice is of maximum effect in advising and informing the Parliament about its decisions on the delisting of a pharmaceutical. As a result we have moved to insert a further sub-section 2 (aba), which reads: In providing advice under subsection (2ab) the Committee shall have regard, as far as practicable, to the matters referred to in subsection 101 (3a). Sub-section 101 (3a) which is being inserted by clause 8 of this Bill, reads as follows: For the purpose of deciding whether to recommend to the Minister that a drug or medicinal preparation, or a class of drugs and medicinal preparations, be made available as pharmaceutical benefits under this Part, the Committee shall give consideration to the effectiveness and cost of therapy involving the use of the drug, preparation or class, including by comparing the effectiveness and cost of that therapy with that of alternative therapies, whether or not involving the use of other drugs or preparations. Senator Coulter is saying that the Committee will take that into account and will specify, in the advice that it gives to the Minister which the Minister must table, all those things. We do not believe that to be the case. We do not believe that, in the absence of the clear statutory requirement to do those things, the PBAC will necessarily do them. There are at least three elements in sub-section 101 (3a). Firstly, they go to effectiveness, secondly, to the cost of therapy, and, thirdly, they include comparing the effectiveness and cost of that therapy with that of alternative therapies. The Minister may well have a particular preparation in mind. He may say to the PBAC, `I want you to give me advice on the delisting of this drug and whether as a method of reducing costs this drug can be removed from the list'. Or he may say, `I want you to give me advice whether this preparation is preferable in that there is an alternative preparation which is made in Australia', an alternative preparation made by a company with which the Government has entered into some good citizenship agreement, which is currently the vogue in corporate relationships between the Government and various manufacturers. The Minister may say to the Committee, `Please give me advice on the following matters . . .' The Committee renders advice on those matters, because it takes the Minister's instructions, and that advice is then tabled, but that advice does not necessarily require the Committee to address itself to the matters specifically set out in sub-section 101 (3a). Senator Coulter says, `Of course, they will do that'. But there is no empirical evidence to demonstrate that a committee, which at the end of the day is subject to some degree of ministerial influence, if presented by the Minister with a request to advise him on matter X, will necessarily also advise him on matters Y and Z simply because in other circumstances it is required to do so. That is the way in which advisory committees to government frequently operate. If the Minister says, `In terms of reducing the overall cost of treatment of disease A, is it desirable to remove a particular preparation from the list-yes or no?'-and the Committee responds to the Minister on the question the Minister has posed, we will not have the sort of evidence which the other purport of the Australian Democrats' amendment would put before the Parliament to allow us to address the possible disallowance of the regulation which the Minister has made. We are simply saying that, among other things, it should be clearly understood that the Committee shall have regard so far as practicable to the matters which are referred to in the amendment which is otherwise being proposed to section 101 of the principal Act. If Senator Coulter is saying that he feels that will be covered and is not necessary, I say to him with the greatest of good will that it is surely better to overstate the proposition than to run the risk that by not stating it we will not have the evidence that we require. If he believes that the matter is covered, simply to specify it by adding one more clause to the Bill seems to me to do no harm. Therefore, if Senator Coulter is right by adding the clause we in no way weaken or unnecessarily complicate the matter. But if Senator Coulter is wrong and I am right, the common objective that we have to get the evidence before us is well served by making the additional requirement. It may well be that Senator Coulter is right. If he is right, adding this clause in no way detracts from the point that he has been putting forward. If by chance he is wrong and I am right, adding the clause will achieve the objective which I believe we both want to see achieved-that is to say, there should be current evidence called for, it should be comprehensive in terms of the issues which it addresses and it should be laid before the Parliament. Therefore, I press the amendment to the Democrat amendment, which I have moved. Senator COULTER(South Australia)(8.41) -I would not be moving in this direction if I believed I were wrong. Therefore I do believe that I am right. Furthermore, I believe that legislation should not be made unnecessarily complex by adding unnecessary clauses. In answer to the points made by Senator Puplick, I point out that we are dealing with sub-section (2aa) which states: The Minister may, by instrument in writing, declare that a drug or medicinal preparation, or a class of drugs and medicinal preparations, shall cease to be a drug or medicinal preparation . . . The decision which the Minister is making is to remove a drug from the list. The effect of the amendment, which I have moved, is that before making a declaration the Minister shall obtain the advice in writing of the Pharmaceutical Benefits Advisory Committee (PBAC) in relation to the proposed declaration. It is quite clear that the Minister shall obtain the advice in relation to whether the drug is on the list. Clearly, clause 8 (1) (b) (3a) to which I have already referred says: For the purpose of deciding whether to recommend to the Minister that a drug or medicinal preparation, or a class of drug and medicinal preparations, be made available- that is, whether it is on the list or not- as pharmaceutical benefits under this Part, the Committee shall give consideration to . . . It then sets out the matters which will be considered by that Committee in giving that advice to the Minister. It seems to me to be absolutely clear that the amendment, as moved by the Australian Democrats, achieves exactly the purpose which the Opposition also wishes to achieve, but without the cumbrous addition of words which are already in the Bill and the interpretation of which is abundantly clear. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(8.43) —The Government does not accept the amendment moved by the Australian Democrats and therefore we do not accept the refinement of it moved by Senator Puplick. I remind honourable senators that the main purpose of clause 4 is to speed up decision-making, not to ignore professional advice. Circumstances can arise where it is desirable to remove the drug quickly-for example, where a company unilaterally raises prices to unacceptable levels and the Pharmaceutical Benefits Advisory Committee (PBAC) has previously advised that there are adequate substitutes available on the list. Another example is where doubts arise about the safety of a drug and urgent action is required in advance of a formal PBAC meeting. I remind honourable senators that the Committee meets only three times a year. Obviously, a Minister would not make such a decision without having professional advice which can be made available to him readily and quickly through his departmental advisers. But to establish the procedure of having to bring the matter to the Senate and having to have the right number of sitting days before a disallowance motion can be dealt with, could really be quite injurious to public health under certain circumstances. I also remind honourable senators of the very sensible remarks made by Senator Sheil, who has not been able to stay in the chamber at this point, to the effect that a Minister would be very ill advised to make the wrong decision under these circumstances. It is not as if such a decision would go unnoticed or uncomplained of. Obviously any Minister would get sensible advice before he took the decision, but we are simply seeking to provide the opportunity for the Minister to act quickly when it is in the public interest. Senator PETER BAUME(New South Wales)(8.45) —I want to respond to the Special Minister of State and Minister Assisting the Minister for Community Services and Health (Senator Ryan) and to Senator Coulter. We have approached this debate in an effort to try to help with the National Health Amendment Bill (No. 2). I remind the Minister that we are supporting the legislation and that the views that we have expressed in relation to the pharmaceutical industry have been expressed with some care because we really are concerned about an industry which is contracting and which has been dying. The questions before the Senate now are questions of life and death for the pharmaceutical industry. I remind the Committee that we are dealing with a situation where the Government is in a position of a monopsonistic purchaser. It has monopsony power over the market and that has put the industry in a most invidious position for some decades now. The Minister talks about the need to move quickly, but it has been known for the Department of Community Services and Health to be vindictive in relation to the pharmaceutical manufacturing industry. There are examples of that. If the Minister is required to table an instrument within X sitting days-or within five sitting days or whatever it might be-- Senator Ryan —It is 15 if it is the same as the regulation. It could go over a parliamentary recess. It could be quite a long period. Senator PETER BAUME —A disallowance process, even when moved, may take 15 sitting days which, of itself, may be a couple of months. It is quite possible for the Department to say to a pharmaceutical manufacturer, `Well, it may well be disallowed. But we will have punished you. You will have been out of the market for two or three months before you can get your disallowance through'. It is not really very satisfying to say that the PBAC, as it has existed and with the functions it has had in the past, has met three times a year, and that is the way it will be. It is a new Committee, it has new functions and a new role. For it to meet three times a year will not be enough; it should meet as often as is required in order to discharge its new functions. If that requires a meeting at short notice to deal with these kinds of urgent situations, I would expect it so to meet. Before I came into this place I served on one of the therapeutic goods advisory committees. These committees met far too seldom to be of any effect at that time. I come back now to Senator Coulter's point. I do not regard this Committee as a debating society-I am not trying to win a point; it is not a question of winning a point. It is a question of pursuing what Senator Coulter is trying to achieve for the industry. We happen to think that what he is trying to achieve is important and we will support the amendment. I say to the honourable senator that if by some chance he has not been right, the industry will have this Hansard before it. It will examine it and will be very disappointed if it finds that the honourable senator has not been able to achieve what he has just told us he wishes to achieve. This was the point made by my colleague Senator Puplick. Let me consider the points that Senator Puplick has made. Are we disagreeing with Senator Coulter? Of course we are not. We are trying to pursue and achieve the same purpose. Senator Coulter knows that we support his amendment. He knows that we are pursuing a common purpose. We have no objection at all to the substance of his amendment. We are trying to make explicit a matter which at the moment is not explicit and which Senator Coulter believes, in good faith, is implicit in the way the Bill is constructed. I understand his argument. He might be right, but I put to the honourable senator that if he is right and these extra words are added, what harm has been done? If the words are not necessary, as he says they are not, no harm has been done. There has been no derogation from the purpose he is seeking to achieve. That purpose will still be achieved. One might say that the amendment is belt and braces, but at least the purpose will still be achieved. It would do no harm whatsoever. It would make quite explicit and definite what we have said is necessary and what Senator Coulter thinks would happen anyhow. On the other hand, if the extra words were necessary and this Committee proceeded not to include them, it might open up the kind of weakness to which Senator Puplick has referred and take away from what Senator Coulter has been trying to achieve. The industry is very concerned that it gets a fair go. That is all it wants. If the Minister is to take drugs, substances or classes of substances off the list, so be it, provided the process has been fair. I put it to Senator Coulter that we are not trying to score points. Both of us are trying to achieve a purpose. We suggest to Senator Coulter that there is nothing to be lost and a little insurance to be gained from adding these extra words and making quite explicit the purpose which we both seek to achieve. Senator WALTERS(Tasmania)(8.52) —The Minister, in reply to Senator Puplick and Senator Coulter, said that the Minister for Community Services and Health would be taking the advice only of experts, that is, officers of the Department, and would, therefore, be taking only responsible and correct advice. As Senator Baume has said, in the past we have witnessed advice by officers of the Department that has not been accurate, nor in the best interests of patients. I give a couple of examples. Treatment for the removal of warts was removed from the schedule of fees. Departmental officers must have advised the Minister, with the best will in the world surely, that such a measure would be all right. With ordinary warts, that may have been the case but, as Senator Coulter is probably aware, there are also genital warts. The Department has now acknowledged that this is not the correct way to go and negotiations are taking place to overcome the problem which has been pointed out to the Department and to the Minister. Another example was when, on advice obviously given to the Minister by departmental officers-the so-called experts-the Minister decided, I think it was in the mini-Budget, that physicians should have only one consultation and two follow-ups. Senator Baume, in Estimates committee hearings, pointed out at least 20 illnesses which could not be appropriately treated by just one consultation by a physician and two follow-ups. Dr De Souza, a departmental officer, agreed with him. Again, the Minister has had to renegotiate with the doctors. So we have had very recent experience of departmental advice-I presume that the Minister sought advice from the Department in this area and that he did not make those decisions off the top of his head-being far from good advice. The advice was dreadful. This has been admitted by the Minister who is now renegotiating the schedule fee with the physicians. So there have been instances of departmental officers not giving the best advice in the world. It is for that reason that I agree with Senator Baume that we need the extra insurance which the Opposition's amendment to the Democrats' amendment gives us. I believe that it is essential. Senator COULTER(South Australia)(8.54) —I make a further point in response to the Minister's remark that the Minister may seek advice from departmental officers. I draw the Committee's attention to the fact that this Bill also seeks to increase the size of the Pharmaceutical Benefits Advisory Committee and to give the Minister the power to set up sub-committees. Presumably, one part of the Bill, at least, recognises that the Minister needs even wider advice. On this point I would certainly accept what Senator Baume has said. I see no reason at all why the Minister should not call the Pharmaceutical Benefits Advisory Committee together quickly if he or she needs rapid advice. That is far preferable to the Minister simply seeking internal departmental advice. Question put: That Senator Puplick's amendment to Senator Coulter's amendment be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 33 —— Majority . . . . . . . . . 4 —— Alston, R. K. R. MacGibbon, D. J.Archer, B. R. Messner, A. J.Baume, Michael Newman, J. M.Baume, Peter Panizza, J. H.Bishop, B. K. Parer, W. R.Boswell, R. L. D. Patterson, K. C. L.Brownhill, D. G. C. Puplick, C. J. G.Calvert, P. H. Reid, M. E. (Teller)Chapman, H. G. P. Sheil, G.Durack, P. D. Short, J. R.Hamer, D. J. Stone, J. O.Harradine, B. Vanstone, A. E.Hill, R. Walters, M. S.Lewis, A. W. R. Watson, J. O. W.McGauran, J. J. Aulich, T. Jones, G. N.Black, J. R. McKiernan, J. P.Bolkus, N. McLean, P. A.Burns, B. R. Macklin, M. J.Childs, B. K. Maguire, G. R. (Teller)Coates, J. Morris, J. J.Colston, M. A. Powell, J. F.Cooney, B. Reynolds, M. E.Coulter, J. R. Richardson, G. F.Crowley, R. A. Ryan, S. M.Devereux, J. R. Sanders, N. K.Devlin, R. Schacht, C. C.Foreman, D. J. Sibraa, K. W.Gietzelt, A. T. Tate, M. C.Giles, P. J. Walsh, P. A.Haines, J. Zakharov, A. O.Jenkins, J. A. Teague, B. C. Button, J. N.Bjelke-Petersen, F. I. Beahan, M. E.Tambling, G. E. J. Cook, P. F. S.Knowles, S. C. Ray, RobertCrichton-Browne, N. A. Evans, GarethChaney, F. M. Collins, R. L. Question so resolved in the negative. The CHAIRMAN —The question now is that Senator Coulter's amendment be agreed to. Question resolved in the affirmative. Clause, as amended, agreed to. Clause 5 agreed to. Clause 6. Senator PUPLICK(New South Wales)(9.03) —I have an amendment to clause 6 in the form which has been circulated in the chamber. The purport of this amendment is to introduce in effect a sunset clause, nominating 30 June 1989 as the date at which the Pharmpay arrangement, which works upon the principle of reimbursing pharmacists who have submitted material to the Department of Community Services and Health using the random sampling method which is provided as one of three alternatives under the new Pharmpay arrangements, shall terminate. Of course, that does not mean `shall be permanently terminated'. It simply means that before 30 June 1989 the Government must come back to the Parliament and demonstrate to the Parliament that the system should be maintained or that the system should be properly be allowed to conclude on that date because it has proved unsatisfactory as a method of dealing with payments under the Pharmpay scheme using the random sampling method. I do not propose to traverse all the ground which I traversed in my speech on the second reading, or indeed to refer people again to the speech made in the House of Representatives by Mr Lamb, an Australian Labor Party member, in which he drew attention to the errors which can easily arise with the random sampling method. What we are saying is that this is a new method of making payments to pharmacists. It is an untried method. We have no objection to trying it. We are perfectly prepared to allow it to be tried. However, we think that it should be reviewed before 30 June 1989. If the review demonstrates that the scheme is worth maintaining, the Parliament will be persuaded and the sunset clause can simply be deleted from the legislation. If, however, it appears that there are errors in this scheme or that the scheme is being abused in some systematic fashion which is not capable of being tidied up relatively easily, this clause will have the effect of terminating that method of payment and leaving simply the two alternative methods, that is, the modem or floppy disk submission of information or the complete analysis and payment on all of the scripts which have been submitted under the Pharmpay scheme in the way in which that currently operates. Again, this is simply a matter of putting some internal policing arrangements into the Act to see whether the new system, which we are certainly prepared to trial, will work effectively, and to provide a mechanism whereby, if it does not work effectively, it will be terminated and not left as an open-ended running problem for the Government. The CHAIRMAN —Senator Puplick, you appeared to be talking about your amendment (2) but not your amendment (1). As (1) is consequential upon (2), it may be convenient for you to seek leave to move them together. Senator PUPLICK —by leave-I move: (1) Page 5, clause 6, line 21, proposed subsection 99aac (2), leave out ``An'', insert ``Subject to subsection (6) an''. (2) Page 5, clause 6, at end of proposed section 99aac, add the following new subsection: `` `(6) No alternative payment election has effect on or after 30 June 1989.'.''. Question put: That the amendments (Senator Puplick's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 34 —— Majority . . . . . . . . . 4 —— Alston, R. K. R. McGauran, J. J.Archer, B. R. MacGibbon, D. J.Baume, Michael Messner, A. J.Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Patterson, K. C. L.Calvert, P. H. Puplick, C. J. G.Chaney, F. M. Reid, M. E. (Teller)Chapman, H. G. P. Sheil, G.Durack, P. D. Short, J. R.Hamer, D. J. Stone, J. O.Harradine, B. Vanstone, A. E.Hill, R. Walters, M. S.Lewis, A. W. R. Watson, J. O. W. Aulich, T. Jenkins, J. A.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P. (Teller)Burns, B. R. McLean, P. A.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R.Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cooney, B. Reynolds, M. E.Coulter, J. R. Richardson, G. F.Crowley, R. A. Ryan, S. M.Devereux, J. R. Sanders, N. K.Devlin, R. Schacht, C. C.Foreman, D. J. Sibraa, K. W.Gietzelt, A. T. Tate, M. C.Giles, P. J. Walsh, P. A.Haines, J. Zakharov, A. O. Bjelke-Petersen, F. I. Beahan, M. E.Crichton-Browne, N. A. Button, J. N.Knowles, S. C. Cook, P. F. S.Tambling, G. E. J. Evans, GarethTeague, B. C. Ray, Robert Question so resolved in the negative. Clause agreed to. Clause 7 agreed to. Clause 8 (Pharmaceutical Benefits Advisory Committee). Senator COULTER(South Australia)(9.15) —Clause 8 of this Bill gives the Minister the power to appoint extra members to the Pharmaceutical Benefits Advisory Committee. Proposed new section 101 (2) (b) states that `not more than 3 medical practitioners in addition to the medical practitioners referred to in paragraph (1) (b)' may be so appointed. The effect of the amendment which the Australian Democrats wish to move is to include among those three at least one who is a member of the Doctors' Reform Society. From the humour being expressed on my right, I take it there are some who may not agree with the stance that is often taken by the Doctors' Reform Society. In recent years among the medical fraternity there has been an increasingly wide spread of views in relation to the types of medical practice offered, the organisation of medical practice as regard private and government health provisions, and also the place of medical care in the whole social arrangement. I think it is also fairly widely accepted that in the past the medical profession has been, and has been conceived to be, a somewhat conservative body of people. I should know that, being one of those people myself. As a matter of fact, just this afternoon during Question Time I heard Senator Walsh, on behalf of the Government, being extremely critical of the Australian Medical Association. It would seem extremely appropriate, therefore, to include one of the better known groups of medical practitioners which over the years has been very active and has had a lot to say on this very issue. The amendment which was circulated last night has been slightly modified, and a revised version has been circulated this evening. There are two reasons for the revision. The first relates to the fact that the earlier version was open to an interpretation in which, if the Minister chose to appoint medical practitioners one at a time, each of those appointees should come from the Doctors' Reform Society. So, eventually we could finish up with three members from the Doctors' Reform Society on the Committee, and that was certainly not intended. The second slight modification arose because the Doctors' Reform Society is shortly to become an incorporated body. It was clearly necessary to define both the Doctors' Reform Society and the Doctors' Reform Society Incorporated, lest they be interpreted as two separate organisations. So the amendments which the Democrats wish to move are trivial. The first amendment proposes that we refer to `sub-sections', rather than `sub-section' in the singular. The second amendment seeks to insert proposed new sub-section (2aa): Appointments to the Committee under paragraph (2) (b) shall be such that when a person or persons is or are members of the Committee because of an appointment or appointments under that paragraph, the person, or one of the persons, shall have been nominated for appointment: (a) by the members of the association in Australia that is known as the Doctors' Reform Society; or (b) if the members of that association form an incorporated body having substantially the same purposes as that association, by that incorporated body.'.''. I seek leave to move the two amendments together. Leave granted. Senator COULTER —I move: (1) Page 7, clause 8, line 9, leave out ``subsection'' (second occurring), insert ``subsections''. (2) page 7, clause 8, after proposed subsection (2) insert the following subsection: `` `(2aa) Appointments to the Committee under paragraph (2) (b) shall be such that when a person or persons is or are members of the Committee because of an appointment or appointments under that paragraph, the person, or one of the persons, shall have been nominated for appointment: (a) by the members of the association in Australia that is known as the Doctors' Reform Society; or (b) if the members of that association form an incorporated body having substantially the same purposes as that association, by that incorporated body.'.''. The CHAIRMAN —So that the Committee will know what we are talking about, a separate circulated paper headed `revised' contains the two amendments with which we are dealing. The question is that the two amendments moved by Senator Coulter to clause 8 be agreed to. Senator PUPLICK(New South Wales)(9.19) —The Opposition will not support these Australian Democrat amendments. This whole business of deciding who is going to be put on these advisory committees is a typical facile example of Democrat pandering to self-appointed spokesmen for various self-interests. The next thing we are going to get from the Democrats is that there ought to be one position for some macrobiotic adviser, some Chinese herbalists, some Afghan acupuncturists, all of whom allegedly have some contribution to make to determining the standards of medical practice and pharmacology in Australia. Senator Coulter described part of the tidying up arrangements as trivial. The Opposition regards these particular amendments as trivial in the extreme. What we want to see on the Committee is the best qualified medical practitioners and pharmacologists around Australia-not people who are representative of particular interest groups that the Democrats happen to be trolling around for political support from just at the moment as a further attempt to shore up their declining fortunes. We certainly will not lend our support to making a severe assault upon the health of the people of Australia simply in order to pander to whatever is the latest group that the Democrats are trying to drag in to rescue their political fortunes. Senator PETER BAUME(New South Wales)(9.21) —I will not intervene for too long. Senator Coulter made some comments about the Australian Medical Association (AMA) having a rather right wing outlook. Senator Coulter —I did not use the term `right wing' at all. Senator PETER BAUME —Well, I just want to remind the honourable senator that Dr Lindsay Thompson, who was the President of the AMA, was put under pressure-in fact, he faced a motion of no confidence in his presidency-by the right wing elements that now control the New South Wales branch of the AMA. As a member of the AMA, one of perhaps several in this chamber-I do not know whether my colleague is a member of the AMA-I was able to attend that meeting and to speak in defence of Dr Thompson and against the people who now control my own branch. In fact, I might tell the Committee that the reason I remain a member of the AMA is so that I can cast my vote against this group each year in the elections to try to get back the kind of moderate leadership that I think would help us all. The point that comes up in relation to these amendments is that the Doctors Reform Society-which is an excellent body; I have spoken to it at its invitation and I have attended its meetings-is very much a minority group; it represents a very small number of doctors in the whole spectrum. We have to ask the question: What is the proper representative body of the medical profession? Like it or not, it is the AMA. I believe that we will do organised medicine a service if we make the AMA as moderate, mainstream and strong as we can-and that means maintaining its health from inside-and recognise it as the official body. If we do not like some of the things it does, it is up to people who are members of the AMA to change it. Whatever respect I have for the Doctors Reform Society, I can see no case for giving it a favoured position on a committee of this kind. Senator WALTERS(Tasmania)(9.23) —This sort of amendment from the Australian Democrats is rather typical of their left wing tendencies. Nobody has suggested that we have a representative from the General Practitioners Society in Australia on that committee, even though the Society-which is a much more right wing society than the Australian Medical Association-has a greater number of members than the Doctors Reform Society. The Doctors Reform Society is just a group of public servants who have a left wing leaning. As Senator Peter Baume has said, it does not in any way represent the wide body of doctors in this country. But it is rather typical that the Democrats would be picking up the odd little groups around Australia, because that is what their constituency consists of. Senator COULTER(South Australia)(9.24) —I could not let those last remarks pass without comment. Even if it were true that the Doctors Reform Society was a left wing group, I hope that Senator Walters is not suggesting that no people with left wing leanings should express a view in the matter of health, particularly in the important matter of the cost of health with respect to drugs. I would reject the appellation of `left wing'. The fact of the matter is that consistently and over a long period the Doctors Reform Society has presented a valuable alternative view, which I believe is an important contribution which it can make in this area. It is a view which hitherto has not been expressed by the mainstream of medical practice. Senator WALTERS(Tasmania)(9.25) —I will answer very briefly. I do not think the honourable senator listened correctly because, while I did say that the Doctors Reform Society is a left wing organisation, I said that nobody is suggesting that the General Practitioners Society in Australia-which is the right wing organisation of the medical groups-be included. No doubt the GPs Society believes that it has also a very valid view that is not being put by the Australian Medical Association (AMA), just as the Doctors Reform Society believes that it has a very valid view that is not being put by the AMA. As Senator Peter Baume said earlier, the AMA embodies the moderate view and we have two groups either side of it both of which no one on this side of the chamber is suggesting should be construed as being the voice of the general medical profession in Australia. Amendments agreed to. The CHAIRMAN —The question now is that clause 8, as amended, be agreed to. Senator WALTERS(Tasmania)(9.27) —Can the Special Minister of State and Minister Assisting the Minister for Community Services and Health (Senator Ryan), who is at the table, explain to me what the word `substantially' means in the context of this clause? I have no idea what the words `substantially' or `costly' mean. I hope the Minister can give me an indication. Also, I would be most interested if the Minister could give me a definition of `significant improvements'. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(9.28) —`Substantially' is a concept that will be resolved by the specialist committee. It will be up to it to give that advice. In fact, the matters Senator Walters raised are matters for judgment for the professional committee. Senator WALTERS(Tasmania)(9.28) —So the Government at the moment is asking us to pass legislation when the Minister cannot give us a definition of its terms, saying that it will be left to an advisory committee to come up with those definitions. Is that correct? The CHAIRMAN —The question is that clause 8, as amended, be agreed to. Senator WALTERS(Tasmania)(9.29) —Mr Chairman- Senator Ryan —She cannot rise twice in a row. The CHAIRMAN —Senator Walters is entitled to speak twice in a row if no one rises to speak in between. Senator WALTERS —Thank you, Mr Chairman. The Minister obviously agrees with my statement-otherwise she would be able to correct me-that the Government does not have any definition on either `substantially' or `significant' and that it is leaving the Pharmaceutical Benefits Advisory Committee to come up with these definitions. That really surprises me. Senator Ryan —You were given your answer, Senator. You do not accept it. I do not want to repeat it and waste everyone's time. Senator WALTERS —I am surprised that the Government has taken us through legislation the terms of which it does not understand the meaning of. The other question I have of the Minister concerns whether she can give us some indication of what could be meant by the statement in the second reading speech-this matter is also referred to on page 7 of the legislation-that the Committee is to give consideration to alternative forms of treatment, for example, surgery. Can the Minister give me an indication of what type of illness, disease or whatever the Minister or the Department was thinking of when expressing the view I have quoted from the second reading speech? It is expressed in the legislation in the following terms: . . . alternative therapies, whether or not involving the use of other drugs or preparations . . . Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(9.30) —I can explain the Government's intention as to that aspect of the second reading speech, as, indeed, I explained the Government's intention with regard to the matters which Senator Walters raised. If Senator Walters does not agree with the Government's view, that is a separate matter. I do not propose to waste the time of the Committee all night by having a sort of badminton match with Senator Walters about whether she agrees with the Government's interpretation or not. I have given it and that is it. In regard to the matter in the second reading speech which she raised, it is the case that, as a matter of principle, there will be some cases in which drug therapy will be cheaper. Senator WALTERS(Tasmania)(9.31) —I ask the Minister to give me just one example. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(9.31) —It is a general principle which is well established in medical practice. I do not think it is appropriate to try to enter into that sort of argument. As the medical practitioners in this place will know, there are cases where drug therapy is cheaper than surgery. Senator WALTERS(Tasmania)(9.31) —The Minister is suggesting the opposite way round. The Minister is suggesting surgery rather than drug treatment. I am asking for an example of that type of thing. During the debate in this chamber, our medical practitioners did not have a clue what the Minister was talking about. The Minister has got it wrong. It was during the debate, and I am asking it now in the Committee of the Whole: What illness, disease or whatever could justify surgery instead of drug therapy? Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(9.32) —I think that it is inappropriate for Senator Walters to pursue this line of action. In some courses of a disease, drug therapy is preferable; in other courses, surgery is prefer- able. It is not for me, a person who is not a medical practitioner, to start guessing about those things. What we are saying is that the Pharmaceutical Benefits Advisory Committee will be required to look at the cost. In cases where drug treatment is better and cheaper, it will recommend that. There will be some cases where surgery will be cheaper and that will be recommended. Senator WALTERS(Tasmania)(9.32) —What I am asking the Minister to do is to seek the advice of the officers beside her. Senator Ryan —I have done that. It is a matter of principle. Senator WALTERS —The officers beside her obviously cannot give us an example and nor can any of the medical practitioners in this chamber. Yet the Minister for Community Services and Health (Dr Blewett), in his second reading speech, stated: The obligation to consider comparative effectiveness and cost will require the PBAC to give consideration to alternative forms of treatment, for example surgery . . . The mind boggles. I ask: What illness, disease or whatever could the Department or the Minister be thinking of when they give that reasoning? I ask for just one example where surgery would be more applicable and cheaper than drug treatment. Senator COULTER(South Australia)(9.33) —Perhaps I can help Senator Walters. One can think of quite a few examples, but I will quote just one. Senator Ryan —She won't believe you. Senator COULTER —I hope that she will. One can imagine a patient in the early stages of osteoarthritis, for instance, with an osteoarthritic hip. In that case quite simple drug treatment, such as aspirin, might be sufficient to relieve the pain. As the disease progresses, one would move on progressively to more expensive drugs until the stage was reached where the patient might be better served by a hip replacement. At that point, drug therapy might have become quite inappropriate. Senator WALTERS(Tasmania)(9.34) —As the Minister and her departmental officers are unable to answer me, we now have the Australian Democrats attempting to answer. But the Democrats have misunderstood the question. I will explain it again. The second reading speech, which the honourable senator no doubt has before him, states: . . . will require the PBAC to give consideration to alternative forms of treatment, for example surgery . . . That is where it is cheaper for surgery to be done than to issue drugs. I do not think that Senator Coulter was trying to tell me that, in the latter stages where the normal treatment would be a hip replacement, a patient who was physically able to take the operation would not be advised to have that surgery and that a doctor would go on prescribing drugs that would be far more expensive than a hip replacement. If he was, perhaps he will tell me. Surely no one would suggest for one minute that a patient should go on receiving drug treatment at a much greater expense than a hip replacement purely because the patient did not want the hip replacement that would give him tremendous relief from pain. That is an idiotic suggestion. If the honourable senator can think of others, he can do so by all means. Clause, as amended, agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported with amendments; report adopted. Bill (on motion by Senator Ryan) read a third time. Debate resumed from 27 October, on motion by Senator Reynolds: That the Bill be now read a second time. Senator ARCHER(Tasmania)(9.37) —To many honourable senators the Egg Industry Research (Hen Quota) Levy Amendment Bill 1987 may not be considered to be very serious, but to the egg producing industry around Australia it is important. I should on this occasion reminisce to the extent that I do on most occasions when we discuss poultry Bills and remember one of our colleagues who was an inbuilt expert on the poultry industry for some years in this chamber. We miss his contribution at a time such as this. The amending Bill is necessary because of the inadequate drafting of the original Bills passed earlier this year. The aim of the original legislative package was to permit the continuation of a levy on egg producers to fund industry research. The earlier Bills facilitated the collection of levies from producers which will amount to $250,000 and which will be matched by the Commonwealth Government. The egg industry in Australia is a $200m per annum industry, with Australians consuming almost 180 million dozen eggs annually. According to the Australian Bureau of Statistics, in 1984-85 there were 863 agricultural establishments engaged in the egg industry, and spread across every State and Territory in Australia. Egg sales have decreased by about 2 per cent in the last five years, although this has been partly offset by increased sales of manufactured egg products during that time. The reduction is due, at least in part, to the real or imagined concern, promoted by nutritionists, about the cholesterol content of eggs. In response, the egg industry commissioned a $2m national advertising campaign aimed at increasing egg consumption. This co-ordinated effort represents a welcome change from the previous fragmentation of State-oriented campaigns. Furthermore, our egg producers have begun to look at developing export markets. In September last year, the industry was successful in negotiating a $15m contract to supply egg products to Japan. The contract for 8,000 tonnes of separated products from 8 million dozen eggs was won over competition from subsidised products from the European Community and the United States. This contract was something of a landmark in export sales because it represented a profitable return rather than simply the disposal of a surplus from the domestic market. The Opposition is strongly supportive of research which increases the competitiveness of rural industries. For instance, technological advance has led to greater automation in the feeding, water supply, temperature and lighting in poultry sheds. The handling of poultry in Australia rates highly with any in the world. It is precisely these technological advances that will necessitate and, I hope, encourage our egg producers to look more keenly at expanding our export markets. The Opposition supports the Bill. Senator POWELL(Victoria)(9.41) —As we are aware, the Egg Industry Research (Hen Quota) Levy Amendment Bill 1987 comes before us because it is necessary to rectify some anomalies in the principal Act-the Egg Industry Research (Hen Quota) Levy Act 1987-which passed through the Senate in June of this year. Honourable senators have been informed by the Government that these anomalies were discovered at the time of the principal Act's passage through the Senate but, because of the double dissolution of the Parliament, there was no opportunity for the Government to make the necessary amendments at that time. This legislation seeks to establish clearly that the levy, which was applied by the principal Act, applies to what are called operative hen quotas-that is actual hen keeping entitlements-and addresses the industry's concern that the provisions defining the application of the levy may not, in the principal Act, have catered for some variations in State and Territory hen quota practices. The Australian Democrats support this amending legislation as it is necessary for the smooth operation of the principal Act which we supported in June of this year. I now refer to some of the comments which I made in supporting the original Bill on 4 June when I took the opportunity of speaking briefly on some important issues relating to the egg industry. These were the continuing rationalisation of the industry, research marketing and export and product development. I take this opportunity to address again the latter of these issues, that is, product development. In the light of the recent chemical residue crisis which has occurred since the passage of the first Bill, and in the interests of the health of the consumer and the welfare of the resource-in this case the hens-I was pleased to note the encouragement given to product development in the area of free range eggs by the Australian Egg Marketing Council which, in its manual, states: Free range eggs can command a premium over ``standard'' eggs, which appeal to that segment of consumers believing that free range eggs are nutritionally, visually and taste-superior. Free range eggs are already marketed by most of the State egg boards and indications are that sales are largely incremental. If more producers went in for free range poultry farming they would find, as was suggested by the Egg Marketing Council in its manual, a ready and fast growing market for their produce. The other area of the industry which should be researched and developed-of course research and development is one area to which the levy will be applied with the passage of this legislation-and which would also command a premium over standard eggs is eggs which are free of the various chemicals and unwelcome additives that are a feature of modern egg production. Indeed they are a feature of most modern agricultural production in general. The Australian Democrats would like to see at least some of the funds from this levy going into research in that area. There is no doubt that consumers here and overseas will increasingly demand, now and in the future, chemical free and unpolluted food. I would encourage the industry and governments to prepare for this demand now. As I said initially, the Australian Democrats support this Bill. Senator BROWNHILL(New South Wales)(9.45) —I am pleased to have the opportunity today to speak on the Egg Industry Research (Hen Quota) Levy Amendment Bill 1987. I think Senator Archer has already mentioned that the purpose of this Bill is to impose a levy on hen quotas for the purposes of research. This matter has been discussed both in this place and in the other place so I do not wish to labour the point. However, I would like to make some comments on the egg and poultry industries. Recently I had the pleasure of addressing the seventh Australian Poultry and Feed Convention in Sydney and meeting with a great many people associated with both the egg and chicken meat industries. As I told the convention-I repeat it again tonight-I believe that the industry is one of the most efficient, technology oriented industries operating in Australia today. The poultry industry has been described as a truly remarkable exercise in organisation, market development and application of technology in animal production, and I would support that view. When one considers the year round availability of fresh eggs at an affordable price and in a variety of sizes, the consumer has reason to be thankful to the producers-both bird and human-and also to those involved in the administration side. The industry is not without its controversies. In recent years, particularly in New South Wales, we have had the very sorry experience of so-called rebel producers wishing to work outside the New South Wales Egg Corporation and this has resulted in court action, disturbing scenes of police raids and angry producers both within and outside the levy system. One can always argue the merits of deregulation of a system but it is important to realise that the egg industry, perhaps more than many other farming enterprises, is composed of a great percentage of small family concerns. There is a great deal of vertical integration, both in the egg and chicken meat industries, and it is important that they be protected and that their investment in the industry is not put at risk by fluctuations in production that might otherwise occur. The other contentious issue that surrounds the industry is the intensive nature of its production. The egg industry has responded well over past decades to the community's demand for eggs in bountiful supply at a cheap cost. It has done this to some extent at the expense of the comfort of the birds involved in the industry. This, of course, has attracted the interest and concern of animal activist groups which, over the years, have targeted intensive poultry producers for physical and verbal abuse, vandalism and public criticism. The animal activist often lives in a utopian dreamland and his picture of the happy farm is mother hens and chickens running around scratching for food, being fed by the farmer's wife who, wearing a bountiful apron, also goes around the farm collecting eggs from happy little hens. In children's story books the hens are invariably white, the eggs are also big brown ones and everybody is happy. Of course in real life that situation cannot exist and even in a free range system, to which Senator Powell has just referred and to which I will come back in a minute, what can often happen is that the free range bird is liable to fall prey to foxes, stray dogs and feral cats. If hens are contained in any area it is often dusty and filthy in dry weather and boggy and filthy in wet weather. Often there is no drenching program, no dropping collection system and the lovely clean egg that is pictured in the story book is turned into a filth covered mess. I ask Senator Powell what she was on about in her speech because her picture of a little farm is not quite what it is in reality. I am a member of the Senate Select Committee on Animal Welfare of which you, Mr Acting Deputy President, are the new Chairman. This is my first opportunity of congratulating you on your appointment as Chairman of that Committee. It is a worthy appointment. You are following former Senator Georges, who did a great deal for that Committee, and I am quite sure that you will fill his boots in a most admirable manner. Probably you will go on to bigger and better things in the Australian Labor Party. I wish you well in that position. I am only too well aware, as I am quite sure you are, sir, of the arguments put forward in support of and in opposition to intensive animal production, particularly poultry and egg production. However, I abhor very strongly the actions of groups such as Action for Animals, who break into properties and steal. They do not even have the courage of their convictions by publicly saying who they are. They do these things in a cowardly and anonymous fashion, abusing people's privacy. I will quote from an article in the Sydney Morning Herald of 2 November 1987. A group broke into Wagners Poultry Enterprises. The article says: The group, which called itself Action for Animals, has struck several times in the past year. It claimed the chickens had been released from ``Wagners poultry prison and would live out the rest of their lives in peace''. An Animal Liberation co-ordinator, Ms Patty Mark, said the group was not associated with ALV, but admitted her support of the protest. I do not think that that sort of action will do anything for the welfare of animals, enabling them to live in a happier environment than they do now. I hope that this sort of action, which is very common overseas, does not proliferate here in Australia. I am hopeful that with the advent of the Animal Welfare Committee, people who are opposed to any industry involving animals will be able to discuss their objections in a rational and logical manner. I am disappointed that some people involved with animal liberation have applauded the vandalism of groups such as Action for Animals. It does their cause and the entire animal welfare debate little good when they take the law into their own hands. There is no doubt that there is controversy surrounding intensive egg production, just as there is dispute about other issues, such as animals in science or live sheep exports. Surely, however, we have the maturity and ability to sit together as responsible human beings to talk out these problems and not act as vigilante groups resorting to violence and abuse of privacy. I will return to the legislation, now that I have had my little say on the matter that Senator Powell talked about. The money that will be collected through this legislation may well help to overcome some of the objections to the intensive egg industry. Research may find more efficient and acceptable means of producing eggs in sufficient quantities for everyone to enjoy at an affordable price. I support the legislation, as does the Opposition. (Quorum formed) Senator WALSH(Western Australia-Minister for Finance)(9.55) —I do not propose to delay the passage of the Bill. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed from 29 October. TAXATION LAWS AMENDMENT BILL (No. 3) 1987 The Bill. Senator MICHAEL BAUME(New South Wales)(9.58) —by leave-I move: (1) Page 6, clause 8, definition of ``asset re-valuation dividend'' in proposed subsection 46e (1), line 13, leave out ``4 June 1987'', insert ``23 September 1987''. (2) Page 8, clause 8, proposed paragraph 46e (6) (a), line 12, leave out ``4 June 1987'', insert ``23 September 1987''. As the Committee will recognise, these amendments will remove the retroactive impact of this latest example of government by Press release. It is self-evident that the details of this legislation are different in some matters of moment from the announcement made on, as I recall it, 4 June-prior to the election and during the last Parliament-when the Government first said that it intended to introduce this legislation. The Opposition has no objection to the thrust of the legislation. There are some matters of concern, as outlined in the debate on the second reading, particularly in relation to the discretion of the Commissioner of Taxation. The problem we have is that the ambit of the proposed new section has been widened by the amending legislation. By making such amendments, we run the risk of dealing unfairly with those people who may well have properly arranged their affairs in keeping with the original thrust of the statement back in June. It is now, of course, November. This is probably nothing like the worst example of government by Press release. We had in regard to capital gains tax a wait of over a year before we saw the ultimate legislation, which was changed repeatedly before eventually it saw the light of day but which was operative from the date of the Press release. This matter has been raised many times. It has been alleged by this Government that it is doing no more than the previous Government did, but that is absolute bunkum. The previous Government sought to block clear avoidance practices where they were in clear breach of the intention of existing legislation, or where the requirement to take action was of, say, a changed view of the law by a court. In that instance, one knows the volume of work under which the Australian Taxation Office was put as a result of the previous Government's determination to stamp out those abuses, and let no one pretend that there was no massive effort in that direction. Many of the delays between the Press release and the ultimate legislation in that period flowed from the volume of work required of the Australian Taxation Office by the previous Government to block those abuses. In that situation there was at least some justification for the gap between the Press release and the legislation because there was an attempt to get round the legislation. Evidently, the purpose of the Taxation Laws Amendment Bill (No. 3) is to fix up some mistakes. As the Senate Standing Committee for the Scrutiny of Bills has reported, the Bill will amend the income tax law, and the measures are designed primarily to prevent abuses of the new imputation system of company tax, and changes to the capital gains, superannuation deductions and gift provisions of the income tax law and the taxing arrangements for certain educational allowances. The Scrutiny of Bills Committee draws the attention of the Senate to the following clauses of the Bill. Under the heading `Clauses 38 and 43-Retrospectivity', the Committee says: Clause 38 of the Bill contains two proposed subclauses (2) and (16) which would have the effect of increasing liability to income tax net retrospectively from two dates. In the case of subclause (2), the date is 4 June 1987; being the date a `draft exposure Bill' was released by the Treasurer. Further, clauses 43 (2) would provide that liability under the proposed clause 42 applies on and after 14th August 1987, the date on which the Treasurer announced the proposed change. The Committee has drawn attention several times in the past year to the practice of the Taxation Office of making legislation retrospective to the date of the announcement of the proposals to change the law. The only course available to citizens under such provisions is that they should arrange their affairs in accordance with these announcements-or `exposure drafts' of legislation which are intended to allow wide discussion of intended legislative change-rather than in accordance with laws made by the Parliament. Accordingly, the Committee draws clauses 38 and 43 to the attention of the Senate under Principle 1 (a) (1) of the Committee's principles, in that in their retrospective application they may be considered to trespass unduly on personal rights and liberties. That is the matter of principle on which the Opposition is determined to press this amendment. I have a letter from Ernst and Whinney, chartered accountants, who have expressed serious concern about this matter. I quote from the letter: The most insidious aspect of the Bill is that it will have retroactive effect to those dividends which were paid on or after June 4 of this year. Once again the Government is attempting to legislate by `press release', as it was on June 4 that the Treasurer released the draft Bill and announced the Government's intention to implement this legislation. The accountants continue: Some may argue that all taxpayers had notice of the proposed legislation from the date of its effect and, therefore, have not been taken `by surprise'. However, the section in the draft Bill released by the Treasurer on June 4, has been amended considerably by the Bill which was introduced to Parliament on 23rd September and yet it still purports to have retroactive effect from June 4. Accordingly, taxpayers who legitimately arranged the affairs so as not to contravene the proposed Section 46e released in the draft Bill, now find that they have contravened the amended section. The amendments to the draft Bill released on June 4 are substantive amendments, not simply stylistic or grammatical amendments. It goes on: Examples of some of the amendments made to the section by the Bill are: (i) the draft Bill only applied if the shareholder which received the dividend then proceeded to sell its shares in the asset holding company. The Bill applies if the shareholder which received the dividend or any other person- I stress the words, `or any other person'- then proceeded to sell its or his shares in the asset holding company or a company ``related'' to the asset holding company. (ii) the draft Bill only applied to the disposal of shares after the revaluation of the asset. The Bill applies to a disposal of shares that occurs before the revaluation of the asset. This is clearly a significant change between the draft and the Bill. Then the accountants continue: The whole ambit of the section has been dramatically widened by the amendments. Regrettably, the only substantial portion of the section that remains unchanged is the date from which the section has effect. It would appear that if one of a multiple number of shareholders subsequently sells its shares after an asset revaluation dividend has been paid, all the shareholders will be denied the rebate. Accordingly, an injustice is done to those shareholders which do not sell their shares. Also, because of holding company situations, the `cost' of the rebate being denied may be borne by persons who were not party to the abuse. The accountants conclude: Even if we are forced to live with law by `press release', we should at least be given the benefit of `amended press releases' having effect from the date of such amended releases, in this case being September 23. It is self-evident that in this case government by Press release has had a clear, uncomplicated, arguable, retrospective impact which is unfair. I believe that we should pass this amendment only to force the Government to behave with propriety and to behave properly. It is not good enough for the Government to maintain this lazy, sloppy and, frankly, less than competent habit of introducing legislation by Press release and then changing it significantly in the way that it has clearly changed the law according to the well-argued case by Ernst and Whinney. There are other matters in this package of Bills that we shall seek to amend. I commend the amendments to the Committee. Senator HAINES(South Australia-Leader of the Australian Democrats)(10.10) —Senator Michael Baume has spent some time talking about what he describes as `the retroactive impact' of these clauses. We canvassed this fairly thoroughly during the second reading debate and I do not want to take up too much of the Committee's time. However, I reiterate that there was a draft Bill that was issued and it was accompanied by a Press release indicating those areas in which the Government anticipated making further amendments. In its Press release, the Government acknowledged that it was conscious of: . . . the legitimate needs of businesses to be able to plan for and order their affairs without the uncertainly of not having seen safeguarding provisions which would, of necessity, have to operate from 1 July or earlier. The decision to release the draft has accordingly been taken, even though some technical provisions are not fully settled. To make matters perfectly clear the next paragraph went on to give as an example the fact that the draft Bill would deny the intercorporate dividend rebate on dividends paid out of profits on the revaluation of assets which are effectively disposed of in certain avoidance arrangements. It went on to describe those in more detail. As I said in the second reading debate, I do not believe that any competent lawyer or accountant would advise clients on how to arrange or rearrange their affairs, paying cognisance to the draft Bill, but essentially ignoring the very clear warning about interposed entities that was made in the accompanying Press release. Senator Michael Baume quoted from a letter from Ernst and Whinney which alleged that some innocent people would be caught up in this, but I very much doubt that that is the case if they were being advised by competent professionals in this area. For that reason we will not support these amendments. Senator WATSON(Tasmania)(10.13) —This area of intercompany dividend rebates is somewhat complicated. I wondered whether I could give the Minister for Finance (Senator Walsh) a simple example, so that he could then explain to the Committee the ramifications of the amendments-in other words, the tax situation before and after the change in the legislation before us. Suppose that we have a situation where a company is short of working capital. Instead of issuing a cash dividend, it issues bonus shares in lieu. Those are then passed on to the shareholders. There has been a revaluation of the assets. Some of those shareholders decide to sell and some do not. Could the Minister tell us the present situation and the situation as a result of these amendments before the Committee? Is there any injustice as a result of these amendments in cases where people do not wish to retain their shares, where some other shareholders actually sell their shares as a result of the revaluation of those assets? If the Minister wishes he could use the case of stock which is the most commonly traded area where this would be likely to arise. Senator WALSH(Western Australia-Minister for Finance)(10.14) —I must apologise as I was not paying attention in the early stages of Senator Watson's question because I was reading an amendment to one of the later Bills. But I think one of the officials is drafting an answer now. If it is handed over in time, I will read it. Senator Haines —Alternatively, we can hang around and wait for it. Senator WALSH —Yes. The amendment has been moved. Of course, the Government will not accept it and we welcome the Australian Democrats' support on this issue. The rationale for moving the amendment is that the provisions in the Taxation Laws Amendment Bill (No. 3) 1987 were not exhaustively forecast by the draft Bill which the Treasurer (Mr Keating) released on 4 June. Therefore, it was argued by Senator Michael Baume that the provisions in the Bill that are now before us should be applicable only from the date of the introduction of the legislation into the Parliament. The Government does not accept that view because, among other things, in the statement of 4 June the Treasurer clearly indicated that some technical matters had not been settled and that the draft new section 46e would be extended when a Bill was introduced to also apply where entities are interposed between a company revaluing its assets and disposing of its shares. The provisions in the Bill achieve this but are subject to a further test which was not contained in the draft Bill-that is, for the provisions to operate there must exist a scheme or arrangement for the avoidance of tax under which a company has obtained a benefit. I think that probably impinges on the question that Senator Watson put, although, as I said earlier, I was not initially paying attention to it. Section 46e is designed to prevent the avoidance of tax on profits or gains which would otherwise arise on the disposal of an asset by a company. It is designed to operate against a scheme that, in its simplest form, involves a subsidiary revaluing a so-called taxable asset to reflect its market value and paying a dividend equal to the so-called gain on revaluation to its parent. The parent, having realised what would have otherwise been a taxable gain on disposal of the asset in a non-taxable form-that is, a rebatable dividend-is then able to dispose of the shares in the asset-holding subsidiary at cost. Tax on the gain on disposal of the asset would thus be avoided. The provisions of section 46e in the Bill will not affect legitimate business planning. It will affect only those entities which have entered into contrived arrangements to exploit what they saw as a loophole in the draft provisions of the June 4 Bill. In relation to Senator Watson's question, I have a handwritten note here. Section 46e applies only where there is a scheme to avoid tax. This is similar to what I have already said. The other tests for section 46e are specific-that is, a company must be unlisted and the revalued asset out of which a bonus issue is paid must be 75 per cent of the net worth of the company. I will not pretend that I understand completely the relevance of that comment. It is made all the more difficult by the fact that I did not hear the question in the first place. If that does not satisfy Senator Watson, I will try to get a more comprehensive and considered explanation from the Treasurer as soon as possible. Senator WATSON(Tasmania)(10.18) —I understand the technical matters that the Minister has raised about the percentage requirements and the fact that it is up to the Commissioner of Taxation to determine whether, in his opinion there is a tax avoidance arrangement. But the question that I asked was whether the Minister could give us the interpretation of the section as it is now and what it is proposed to be as a result of these legislative changes in the case where a company is short of working capital. It has an asset, say stock, which is the subject of a revaluation. It passes through and some of those shareholders dispose of their assets but some do not. Is there any injustice for those who do not sell and what are the tax consequences that arise as a result of the changes that we are enacting tonight compared with the status quo? Senator MICHAEL BAUME(New South Wales)(10.19) —To give the Minister the opportunity to obtain advice from his advisers-- Senator Haines —You will talk for a while. Senator MICHAEL BAUME —Thank you, Senator Haines; you are absolutely right. The question of retroactive impact to which I referred earlier is also evident in another section of this Bill. I have received correspondence from some Victorian barristers and solicitors who act in this area. They point out that the amendments proposed would retrospectively give power to the Deputy Commissioner of Taxation to take legal action outside the statute of limitations to recover additional or penalty tax on income tax under section 217 of the Income Tax Assessment Act where he presently does not have the power. We are not going to move an amendment to correct the situation because of the quite reasonable response from the Treasurer (Mr Keating) pointing out that the method of correcting the situation could well be a greater disadvantage to the revenue than the disadvantage which the proposed situation will be to the taxpayer and that the burden of disadvantage would be so enormously against the Commissioner as to be unreasonable. However, there is no doubt in the Opposition's mind that the situation creates an unreasonable capacity on the part of the Commissioner to benefit from indolence. In other words, if the Commissioner delays dealing with disagreements, then penalty tax will be applied from the initial date. So it could well be argued that the taxpayer will face a greater burden because penalty tax will be applied even in cases where the taxpayer has paid the primary tax. This is clearly a matter which could best be resolved by the Government providing some directions to the Commissioner as to how he should exercise his discretion under section 207, which gives him power to waive additional tax. Surely the Commissioner should be directed not to apply penalty tax before the statute of limitations would normally have removed it if the length of delay is due to the Commissioner's delays. Surely that is not unreasonable. It does not give any unfair advantage to anyone. It simply ensures that the Commissioner's indolence, if one can call it that in the circumstances, or unavoidable delays-- Senator Watson —Or loses the file. Senator MICHAEL BAUME —Or a file being lost in either the bottom of the drawer or, as happened in one instance, on the top of the desk-do not impose a greater burden on the taxpayer. Lost files or unacceptable, unaccountable or unreasonable delays by the Commissioner can bring a special penalty to the taxpayer, even when he has paid his primary tax because the penalty can still apply beyond the statute of limitations. As I said, we are not pressing ahead with any amendments on this score because of the difficulty in framing amendments which would not significantly disadvantage the Government. To that extent I believe that our course of action is reasonable and sensible. But I ask that, in response, the Government be as reasonable and sensible as we are and give an undertaking that it will request or instruct the Commissioner to use his discretion in the manner in which I have outlined. Senator WALSH(Western Australia-Minister for Finance)(10.22) —If I have understood Senator Michael Baume correctly, his claim or assertion that a special penalty would be applied to these taxpayers under such circumstances is mistaken, for this reason: additional tax is not payable if the dispute is decided in favour of the taxpayer. Therefore, the proposal put forward by Mr Dwyer can have application only if it is found that the tax which was correctly payable was payable after the due date. In the case of a determination or a finding at some later time that the tax which was correctly payable had not been paid on the due date, the taxpayer concerned would incur additional penalties. I am quite willing to put to the Treasurer (Mr Keating) the proposition that, where any taxpayer is disadvantaged by lethargy or tardiness on the part of the Australian Taxation Office, then the Commissioner should exercise his discretion not to apply penalties, although it does not seem to me that that is a relevant point in this case. As I said, I am quite willing to put to the Treasurer that he take up the question with the Commissioner of Taxation. Amendments negatived. Senator WALSH(Western Australia-Minister for Finance)(10.25) —Mr Chairman, one of the officials is writing a note for me in response to Senator Watson's question but it is not quite finished. I do not know whether the Committee wishes to wait for another 30 or 60 seconds or whether Senator Watson will be satisified if he receives a reply in writing. Senator WATSON(Tasmania)(10.26) —I would be happy if the answer were incorporated in Hansard at a subsequent date, perhaps some time tomorrow. I have a further question. Is it the intention of the Commissioner of Taxation to give a taxation ruling as a result of the changes which have been made to two sections of the Act in relation to situations that arise as a result of advances or excessive payments which are deemed to be dividends? There is a change in the legislation deleting the word `income' and introducing the new word `profit'. There are certain other consequential changes. There is an area of some ambiguity. Is it the Commissioner's intention to issue a taxation ruling to clarify the ambiguities relative to those two amendments? The CHAIRMAN —Senator Watson, I must warn you that it would not be practical tomorrow to insert an answer in today's Hansard. Senator WATSON —Not today's Hansard, tomorrow's Hansard. The CHAIRMAN —It would not appear in this debate. Nevertheless, if you speak for long enough the Minister might have an answer. Senator WALSH(Western Australia-Minister for Finance)(10.27) —We have about 2 1/2 minutes to go before the adjournment debate. I suppose that I could recite Mary Had a Little Lamb or something like that for the next 2 1/2 minutes. Senator Watson has asked a couple of serious technical questions which deserve a considered answer. I expect that the officials could provide a considered answer by whatever time tomorrow the Committee resumes discussion of this Bill. Does Senator Watson have any other serious questions? Senator Watson —A taxation ruling in relation to-- Senator WALSH —If Senator Watson has another technical question which deserves a considered answer I suggest that he put it in the next 1 1/4 minutes. We will then adjourn and get him the answers by tomorrow. Senator WATSON(Tasmania)(10.28) —I repeat my earlier request: Could the Commissioner of Taxation issue a ruling in relation to the repeal of two sections of the Act, sections 108 and 109 and their replacement with new provisions as a result of the amendments before the Bill? There are a couple of areas of uncertainty as a result of the change of the word `income' to the word `profit' and the Commissioner's power to deem profits to be earned in situations even when no profit is earned by the company. There is some ambiguity as a result of the extension of those provisions to include associate companies and so on. Is it the Commissioner's intention to give a taxation ruling to clarify a couple of areas of ambiguity that could arise? The CHAIRMAN —Order! It being 10.30 p.m. consideration is interrupted. Under sessional order I put the question: That the Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Chairman having reported accordingly- The PRESIDENT —It being 10.30 p.m., under sessional order, I propose the question: That the Senate do now adjourn. Senator PUPLICK(New South Wales)(10.30) —I wish to raise on the adjournment tonight a matter which goes to the question of what I perceive to be threats made against me in terms of an objection which has been taken to matters arising from the conduct of an Estimates committee hearing. In order to put this matter in perspective, it is necessary to go back very briefly over a couple of matters which arose in the course of the last election campaign. During the last election campaign the Liberal Party of Australia adopted as a policy, in relation to the promotion of sport in Australia, the abolition of the Australian Sports Commission. We were concerned, among other things, at criticisms which had arisen about the extent of the growth of bureaucracy in sport, and in particular a comment which had appeared in a strategy plan which the Australian Sports Commission had released. Under the heading of `Key Challenges' in that Australian Sports Commission strategy plan the following appeared: The Commission believes that 3 major issues and concerns within Australian sports today require particular attention. They are: (i) The level of bureaucracy in sport. Throughout sport in Australia, and particularly within the 3 levels of government, the bureaucracy of sport has grown significantly in recent years. That growth has occurred during a period in which Australian sporting performance, with some exceptions, has been disappointing and declining. The more we have spent on bureaucratic structure the less able, it appears, we have been in producing world class athletes and teams. Arising from our consideration of a number of these matters, my Party adopted a policy for the abolition of the Australian Sports Commission and, in announcing that policy, the then shadow Minister for Sport, Mr Peter Reith, made some comments about the extent to which he believed that we had not as a nation got value for money out of the Sports Commission and that he believed that the Sports Commission had not really done very much to assist the development of sports in Australia. It appears to me that that is a comment which a person in political activity is perfectly entitled to make, and in particular when advancing a policy for the abolition of a particular body and deciding why that body should be marked for abolition. Mr Reith's comments apparently upset some members of the Sports Commission and people employed by the Sports Commission. As a result, they issued a statement saying that they regarded the shadow Minister's comments as defamatory and that they proposed to take legal action against him. In fact they did obtain advice from a firm of solicitors and indicated to the shadow Minister that, unless he published certain retractions, they would proceed against him in the courts for a statement alleged to be defamatory. Mr Reith made it quite clear that his comments were not intended in any way to be defamatory of individuals within the Sports Commission, or indeed of the integrity of people, or to reflect upon the reputations of people associated with the Commission in their personal capacity. No further action was taken, although I hasten to add that Mr Reith was perfectly satisfied that the comments that he had made were in no way defamatory comments and in fact were in no way legally actionable comments. Senator Peter Baume —That would be determined somewhere else anyway. Senator PUPLICK —Indeed, as Senator Peter Baume says, that is a matter which, if required, would have been elsewhere determined. I was interested when it was drawn to my attention that the Sports Commission had decided to get legal advice not from the Australian Government Solicitor but in fact had gone outside to get private legal advice, and that presumably there had been some expenditure of public money in getting that advice. As a result in Estimates Committee F on 8 October I raised this matter with representatives of the Sports Commission, in particular with Mr Hartung, who is the General Manager of the Australian Sports Commission and a person, I add, for whom I have a very high personal regard. I attempted to find from Mr Hartung certain answers. I asked Mr Hartung questions as follows: Senator PUPLICK —In the course of the election campaign a statement was made by the then Opposition shadow Minister, Mr Reith, about the operation of the Sports Commission. The Chairman indicated that he believed that the statement was defamatory and that he had formed that view on the basis of an opinion which had been sought from the firm of Dawson Waldron. Is that correct? Mr Hartung-That is correct. Senator PUPLICK —Who paid for the advice? Mr Hartung-I would have to check precisely how it was paid but I am making the assumption that the Commission paid the bill. Senator PUPLICK —So during the course of a political dispute in which a member of one political party made some comments about not, as I recall, any individual but a commission, the Commission used public money to obtain a legal opinion that a matter may have been defamatory, and published statements based upon legal opinion which had been paid for out of public money. Who authorised the expenditure? Mr Hartung-There was a meeting of the Commission executive committee at the time, which considered the statements made by the Opposition spokesman, and it was its decision to seek legal advice. Senator PUPLICK —How much did it cost? Mr Hartung-I would have to take that question on notice. Mr Hartung then assured the Committee, and I accepted his assurance, that the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown) was not personally involved in this matter. I subsequently questioned Mr Hartung as follows: Senator PUPLICK —Does the Commission normally have access to the advice of the Australian Government Solicitor? Mr Hartung-Yes. Senator PUPLICK —Why did it not use the Australian Government Solicitor? Mr Hartung-On that occasion there was a discussion by the executive of the Commission which required urgent and immediate attention. A little later the questioning went as follows: Senator PUPLICK —Are you saying that the Australian Government Solicitor was not the quickest possible way? Mr Hartung-It was the opinion of the executive committee that the best way to get the best advice on these sorts of matters was to go to the firm of solicitors you mentioned earlier. Senator PUPLICK —Do you recall any other instances where criticisms have been made of the operation of the Commission, the competence of the Commission or the expenditure arrangements entered into by the Commission, which have caused it to seek legal advice as to whether its commissioners have been collectively or individually defamed? Mr Hartung-I cannot recall any. Finally, Mr Hartung agreed to take on notice a number of questions about the way in which the meeting was conducted at which it was decided to seek external legal advice and pay out of public moneys for that external legal advice, and who was responsible for making that decision. I must say that I was subsequently satisfied with the information given to me by the Commission in terms of the provision of the data. I thought that the matter was by and large concluded at that stage. However, by letter dated 27 October 1987, Mr A. E. Harris, the Chairman of the Sports Commission, wrote to me directly as follows: Dear Senator Puplick, My attention has been drawn to Hansard dated October 8. Therein is reported your cross examination of the General Manager of the Australian Sports Commission, Mr. Hartung in respect of statements made by Mr. Reith about the Sports Commission and subsequent legal action taken by the Sports Commission in relation to those statements by Mr. Reith. Firstly, let me say that had you enquired of me as Chairman of the Commission as to the matters to which you subjected Mr. Hartung, you would have been given a prompt, factual and courteous response. As I read the cross-examination, threadneedled through it was the strong suggestion that the action taken by the Commission in respect of the defamatory comments made by Mr. Reith was taken for political reasons and that there was some improper cost to the public. I find this objectionable and there is not a scintilla of evidence to support such a suggestion. The fact is that Mr. Reith, presumably at the taxpayers expense, launched a defamatory attack on the Commission and its members. At a time, as you point out in your cross-examination of an Election. There are two things I want to say to you, Senator Puplick, and I want you to be quite clear about them. Firstly, any time anybody defames myself or any organisation with which I have an association, I will pursue my legal rights as I see fit. Secondly, I am meticulous in my public duties to ensure that there is no politicisation of them, whatsoever. Mr. Hartung, in due course, will do as you have requested of him, namely answer your questions. I, in due course, will make enquiries as to the cost to the public of this cross-examination and when I receive this information I will determine what further action I propose to take. One thing I will be doing is sending a copy of this letter to Mr. John Valder in his capacity as President of the Liberal Party with some appropriate comments. In fact, I will attach a copy of the letter to Mr. Valder for your information. The letter to Mr Valder reads: Dear John, I am attaching hereto a letter I have sent to Senator Puplick. You will readily perceive that I find his innuendos not only false but insulting. In fact, if they were said outside of the Parliament, I would probably pursue him legally for defamation. This kind of behaviour is becoming progressively more objectionable to the Australian public. It is certainly objectionable to those who are requested, from time to time, to give their personal and financial support. The job of raising money for politicians I know has always been difficult. It becomes that much more difficult when people prostitute the system. What is implicit in the cross-examination of a public servant by Senator Puplick is frankly beyond the pale of reason and, as an Australian, I have no intention of tolerating this kind of behaviour by politicians misusing their position of privilege. Look forward to seeing you soon. With warmest personal regards. Yours sincerely, Ted These letters from Mr Harris, both the one addressed to me and the one addressed to the then President of my Party, are clearly intended to be threatening and intimidatory of me in a personal sense, in terms of the threat to pursue me legally if I persist with what is alleged to be some sort of cross-examination which took place during the Estimates Committee hearing. This is also an attempt to threaten me by enclosing a letter addressed to the then Federal President of my Party, in effect saying `If Senator Puplick continues to behave in this fashion, do not look to us, to me or to my company for any financial support for your political party', with the phrase `The job of raising money for politicians I know has always been difficult'. In terms of Mr Harris's original letter, firstly, it asserts certain things which may or may not be true; that is to say, that Mr Reith's original statements were defamatory. That matter has not been settled and there is no way in which it could be settled except for the matter to have proceeded to court. Secondly, it asserts that Mr Hartung was subjected to some sort of cross-examination. I suppose whatever term one chooses to use about the robust exchanges which take place from time to time in Estimates committees, they may be put down as cross-examination. I presume that in fact is part of the ongoing process for which Estimates committees were properly established. Thirdly, Mr Harris says, `If you had enquired of me . . .'. Mr Harris was not a witness before the Estimates Committee. Had he been a witness, I would have inquired of him. Mr Hartung happened to be the senior person there. Mr Harris suggests that there was some improper cost to the public being asserted by myself. What I was trying to find out was whether there was a cost to the public, why was the Australian Government Solicitor not used, why was the external legal advice sought, and what was the cost of it. Mr Harris alleges that Mr Reith made a defamatory attack upon the Commission, to which I have already referred, and that that was done `at the taxpayers' expense'. I am at a loss to understand where additional expense to the taxpayer arises as far as that is concerned. Mr Reith made a statement, in his capacity as the shadow Minister. I am not aware that there was any cost to the taxpayer in that particular exercise. Then Mr Harris went on to say `if anybody defames myself'. He was in no way defamed by anybody, and I think that is quite clear. He then says that he will in due course `make enquiries as to the cost to the public of this cross-examination and when I receive this information I will determine what further action I propose to take'. Mr Harris is perfectly entitled to take whatever action he thinks appropriate, but he will in fact find that costs to the taxpayer of Mr Hartung answering questions at the Senate Estimates Committee are part of the normal procedures of the operations of Estimates committees. I am sure that Mr Harris is in a position to determine what further action he proposes to take. I have not had an opportunity to consult Mr Valder, although I did try to get hold of him since the receipt of this particular letter. I have no doubt that he would be singularly unimpressed receiving a letter which in fact makes it basically plain that the purpose of the letter is to say to the Federal President of a political party: `If one of the members of your political party, properly exercising his responsibilities as a member of an Estimates committee, chooses to use that forum to seek information, and implicitly to make criticism of the way in which a commission with which I, as an individual, am associated, and continues to act in that fashion, you, Mr Federal President, should be on notice that there is perhaps some financial downside for your party in allowing that sort of examination to continue without control or in an unchecked fashion'. I do not know whether that sort of letter-either the one addressed to me or the one addressed to Mr Valder-in fact constitutes a breach of privilege. I am frankly not overly concerned whether it does or does not. What I do want to put on the record clearly is this. I think that during my participation in Estimates committees-and Senator Richardson, who is in the chamber this evening, was present as the Minister on duty during the conduct of the Estimates committees this year-I have established that I am fairly vigorous in the questions that I ask and in the information which I pursue. The information which I have sought I believe is information sought properly in the discharge of my public duties and public responsibilities. I am certainly not going to be intimidated by Mr Harris, whoever he is, whoever he thinks he is and whoever he purports to be in these things, not to ask the questions which I think are appropriate to be asked. Indeed, when the material from the Estimates committee, which I sought, is supplied to the Senate, the full details will be available and on the public record. They will demonstrate when the meeting about which I sought information was held, who was present at the meeting, what the cost of the legal advice sought was, who authorised the expenditure, what was the item against which the expenditure was charged, and whether in fact there was any consultation between the Commission and the Minister. On that matter, as I say, I have accepted the assurance given by Mr Hartung that the Minister was in no way involved in that exercise, and I do not think that has ever been a matter which I have sought in any way to question or to query. As far as this particular matter is concerned, I want to make it perfectly clear that I am not capable of being intimidated in this fashion, nor do I believe that attempts to intimidate in this fashion should pass without being put upon the public record. I have certainly attempted to do that this evening; I believe I have done it in a reasonably dispassionate form. But I put both Mr Harris and anybody else clearly on notice that I am not-nor do I believe is any senator on either side-capable of being dissuaded from pursuing the correct method of obtaining information about the expenditure of public moneys by the threats, direct or implied, whichever one may wish to see, which I believe are quite clear in Mr Harris's correspondence both to me and to the then Federal President of my Party. I certainly do not intend in any way to be diverted from my course of pursuing what I see to be my proper public responsibilities. Senator PETER BAUME(New South Wales)(10.50) —The parliamentary delegation that attended the European institutions recently also had the opportunity to attend the Second Strasbourg Conference on Parliamentary Democracy. As you will know, Mr President, from your own experience, during that trip various members of the delegation were able to speak on behalf of the delegates to some of the plenary sessions. Mr Robert Brown, the honourable member for Charlton in the other place, was able to present a discussion to the plenary session at which the Organisation for Economic Co-operation and Development report was discussed, and I was able to speak to the Second Strasbourg Conference on Parliamentary Democracy on behalf of the Australian delegation. At that stage I made a brief speech about the situation in Fiji. It is the intention of the delegation, when it presents its report soon, to include the contributions by the members of the delegation to the plenary sessions. But, at this stage, I seek leave of the Senate to table, ahead of the report of the delegation, the presentation that I made. Leave granted. Senator RICHARDSON(New South Wales-Minister for the Environment and the Arts)(10.52) —I shall be brief in response to Senator Puplick's comments about the conduct of Estimates Committee F, the reply that he received from Mr Harris and the letter that Mr Harris forwarded to John Valder. In respect of the letter forwarded to John Valder, if for any reason Mr Harris should decide not to make a donation to the Liberal Party of Australia, I will be delighted. I would hope to encourage him in that course of action. However, prior to Mr Harris's letter, we had highlighted at the Estimates Committee hearings the difficulty that comes about when commissions, which largely comprise people who are not public servants and who have their own lives to lead and roles to play, come under criticism from politicians. Some of them do not react well to criticism. On this occasion the Australian Sports Commission decided to take some action after its role was criticised by Mr Reith. As Senator Puplick correctly stated, the Commission did seek legal advice from Dawson Waldron, and I believe that the Estimates Committee has tonight been handed some answers on that matter. I will check whether or not all of them are there, but I think they have all been provided tonight. There was a spirited exchange between Senator Puplick and a Mr Hartung on that occasion. Having been to a number of Estimates committee hearings, I am not surprised by spirited exchanges. They do occur from time to time. It is a matter, I suppose, for Mr Harris to then determine, on the basis of his reading of the transcript, what he would consider matters of manner, taste or tone and to act accordingly. I think that is what he has done on this occasion. Anyone who knows Ted Harris knows that he is a man of some passions. Those passions have obviously been lit on this occasion and he has rushed to print. I did not know of the existence of the letter until tonight; nor did I know of the letter to Mr Valder. Personally, I regret that this incident has gone as far as it has. I would have thought it pretty minor in the first place. I do not think that the actions of the Sports Commission are really a big deal. They were a small deal at best. The fact that they have been carried further is something that I regret. However, obviously no-one can attempt to muzzle any senator at an Estimates committee hearing. I am sure that that statement would meet with the agreement of all honourable senators. Senator Michael Baume —Some Ministers try. Senator RICHARDSON —That is often for a different reason, and always for a better purpose. However, as I said, I regret that the matter has gotten this far. I hope that over time Mr Harris will cool his passions and Senator Puplick will not feel too intimidated-although, knowing Senator Puplick, I suspect that it would take rather more than those two letters to have him not ask the questions he wishes to ask the next time around. In conclusion, I would say that if whatever Senator Puplick has done causes a company the size of Ampol not to give donations to the Liberal Party, I am delighted. I would have to say, however, that, as far as the Government is concerned and as far as all senators are concerned, the way that Estimates committees are run will not be affected by the letter, and I hope that on the morrow the matter will all be forgotten. Question resolved in the affirmative. Contingent Notice of Motion Senator SHORT(Victoria) —by leave-I give notice that, contingent on the Migration Amendment Bill 1987 being read a second time and before the Bill is considered in Committee of the Whole, I shall move: That so much of the Standing Orders be suspended as would prevent Senator Short moving a motion to postpone the consideration of the Migration Amendment Bill 1987 in Committee of the Whole till the sitting day next succeeding the presentation to the Senate by a Minister of draft regulations to be made under proposed paragraphs 67 (1) (ac), (ca), (cb) and (cc), contained in clause 9 of the Bill. Senate adjourned at 10.55 p.m. The following papers were tabled: Fisheries Act- Fisheries Notices 1987- No. 196-Revocation of Fisheries Notice No. 179-Prohibition of trawling off North-Western Australia, dated 23 September 1987. No. 197-Revocation of Fisheries Notice No. 178-Prohibition of trawling off North-Western Australia, dated 23 September 1987. No. 198-Revocation of Fisheries Notice No. 180-Prohibition of trawling in waters west of Australia, dated 23 September 1987. No. 199-Amendment of Fisheries Notice 195-Prohibition on the taking of prawns off Northern Australia, dated 15 October 1987. ADMINISTRATOR'S PROCLAMATION-COMMENCEMENT OF AN ACT: A Proclamation by His Excellency the Administrator of the Government of the Commonwealth of Australia, notifying that His Excellency had proclaimed the following sections of an Act to come into operation on the date specified: Nuclear Non-Proliferation (Safeguards) Act 1987-Provisions of Division 2 of Part III-28 October 1987 (Gazette No. S 284, 23 October 1987) The following answers to questions were circulated: (Question No. 71) Senator Reid asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 6 October 1987: (1) In the case of a patient whose reference number was MSS 6227 did the Department of Veterans' Affairs NSW Branch Office notify Mr Petroni (Clinical Psychologist), on 12 December 1986, that although he had been given approval for 6 sessions of treatment from 27 November 1984, as this number had been exceeded, payment for any further sessions was declined unless prior approval was obtained. (2) Did Mr Petroni advise the branch office on 27 February 1987 that his secretary had obtained approval for 6 more sessions, and again, later, for another 6; if so, how can this be reconciled with the statement by the Branch referred to in (1) above. (3) Did Mr Petroni first see this client on 25 July 1984 and was the first payment not made until 12 December 1984; if so, what was the reason for this delay. (4) Why were accounts for sessions over the period of treatment paid at apparently inconsistent rates, and exactly what rate of payment for each session was made. (5) How many sessions were paid for by the Department at the rate of $38 per visit; did the Department regard these as overpayments; has any action been taken to recover any part of these payments, as overpayments; and who made the decision not to reclaim all or part of any alleged overpayment. Senator Reynolds —The answer to the honourable senator's question is as follows: (1) Yes. (2) Yes. Although Mr Petroni conveyed this advice, there is no record of any request or approval having been given for other than the first six sessions. (3) The first payment to Mr Petroni for treatment received by the patient in question was made on 30 November 1984. The delay in payment was due to time taken to investigate Mr Petroni's accounts and staff shortages. (4) All payments should have been made at the rates set by the Inter-Departmental Committee on Fees and Allowances. Most accounts were paid at the departmental rate of $37.50 for the initial consultation, $18.80 for each subsequent visit and $15 for a tape. Six sessions were paid at the incorrect rate of $38 per visit. (5) Six sessions were incorrectly paid at the rate claimed by Mr Petroni at $38 per visit. Mr Petroni was incorrectly advised that the amount overpaid would not be recovered. The Deputy Commissioner, New South Wales, has been instructed to pursue recovery. Senator Button —On 17 September 1987 (Hansard, page 224), Senator Lewis asked me as Minister for Industry, Technology and Commerce and as Minister representing the Minister for Industrial Relations, the following question without notice: Is the Minister aware that strike action in Victoria by members of the Amalgamated Metal Workers Union in defiance of recommendations by the Australian Conciliation and Arbitration Commission has forced Wilco Electrical Pty Ltd-a Victorian manufacturer of sophisticated electrical equipment for local and export markets-to close down its Abbotsford factory in Melbourne and that now bans have been placed on its Notting Hill factory? Is the Minister further aware that pickets imposed at the plant at Abbotsford are being used to prevent the company from moving equipment from Abbotsford, even though this equipment is crucial to the continued operation of the company's plant at Notting Hill where 220 people are employed? Does not this kind of industrial action, which is placing in jeopardy the ability of a high-tech Australian manufacturer to compete in world markets, make a mockery of the rhetoric in the Australian Council of Trade Unions (ACTU) document Australia Reconstructed? What action has the Government taken or will it take to bring these unionists to their senses? In my reply, I undertook to refer the question to the Minister for Industrial Relations. The Minister has provided the following response: The Government is aware of recent industrial action against Wilco Electrical Pty Ltd and of the company's closure of its Abbotsford plant. I understand that Wilco announced in February 1987 that it intended to close the Abbotsford plant and relocate those operations at its Notting Hill plant. The industrial action centred on unresolved issues associated with the decision to close the plant and, as such, was not the direct cause of the closure as suggested by Senator Lewis. The Government is also aware that pickets were established at the Abbotsford plant and that the then employees at the plant continued strike action despite recommendations by Mr Commissioner Peterson of the Australian Conciliation and Arbitration Commission that they return to work. The Government does not condone those actions, indeed it is our strong view that compliance with recommendations of the Commission is essential for the effective operation of dispute settlement mechanisms. I understand that Wilco and the unions involved have been able to reach agreement on the issues in dispute and that the picket was lifted on 18 September 1987.